S.Korea's money supply hits record high in April

Source: Xinhua | 2020-06-11

South Korea's money supply hit a record high in April amid the record-low policy rate, central bank data showed Wednesday.

The M2, called broad money, reached a fresh high of 3,018.6 trillion won (2.53 trillion U.S. dollars) in April, up 9.1 percent from a year earlier, according to the Bank of Korea (BOK).

It was faster than an expansion of 8.4 percent in the previous month as the BOK slashed its target rate by 50 basis points to an all-time low of 0.75 percent in March.

The M1, dubbed narrow money, jumped 16.9 percent in April from a year earlier, after advancing 14.6 percent in March.

The M1 refers to the currency in circulation, demand deposit, transferable savings deposit equivalent to cash. The M2 adds money market funds, time deposit and financial products that mature in less than two years to M1.

The liquidity of financial institutions, called Lf, increased 8.6 percent in the cited month. The year-over-year growth of liquidity aggregate, the broadest measure of money supply, was 7.9 percent.

The Lf includes financial products with a maturity of more than two years and liquidity at insurers and brokerages along with M2. The liquidity aggregate adds state and corporate bonds to the Lf.