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Banknotes in circulation top record W90 tln in Feb.

All Headlines 09:33 April 11, 2016

SEOUL, April 11 (Yonhap) -- The amount of banknotes currently in circulation has reached over 90 trillion won (US$78.12 billion), the central bank said Monday, apparently in line with the bank's continued easing stance to bolster growth in Asia's fourth-largest economy.

Outstanding banknotes came to 90.79 trillion won as of end-February, gaining 1.3 percent from a month earlier and breaching the 90 trillion-won mark for the first time in the country's history, according to the Bank of Korea (BOK).

Outstanding banknotes refer to actual bills in circulation and are different from cash in circulation, which partly reflects market liquidity.

The central bank continuously injects fresh bills into the market while simultaneously withdrawing those already in circulation, partly to replace damaged bills and also to maintain an adequate level of market liquidity.

In 2015 alone, the BOK injected about 20.5 trillion won worth of new 50,000-won bills into the market, up 34.8 percent from the previous year.

As of the end of February, 50,000-won bills in circulation amounted to 67.85 trillion won, up 1.7 percent from the previous month, according to the BOK.

Outstanding 10,000-won bills inched up 0.1 percent to 17.56 trillion won over the cited period, while the amount of coins in circulation came to 2.28 trillion won as of end-February.

The overall growth in outstanding banknotes comes amid continued efforts by the central bank to bolster spending and growth here.

The BOK has stood pat on its key rate for nine consecutive months after sending the key rate to a record low of 1.5 percent through a series of four rate cuts in less than a year.

Such efforts have also led to a rise in the BOK's outstanding loans to policy lenders, which in turn could have increased their own lending to local firms.

The BOK's outstanding loans to policy lenders, such as the state-run Korea Development Bank, came to 18.92 trillion won as of end-February, the highest amount since the central bank began compiling such data in January 1971.

With an increase in overall market liquidity, the BOK's cost of maintaining market stability also increased.

The BOK issued 191.5 trillion won worth of monetary stabilization bonds in 2015 alone, with outstanding bond issues coming to 184.4 trillion won as of the end of last year.

bdk@yna.co.kr
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