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S. Korea's money supply continues to grow in Oct.

All News 12:00 December 11, 2019

SEOUL, Dec. 11 (Yonhap) -- South Korea's money supply growth slightly accelerated from a month earlier in October on a steady increase in funds held by both local households and companies, central bank data showed Wednesday.

The country's M2 came to 2,874.3 trillion won (US$2.42 trillion) as of end-October, up 22.3 trillion won or 0.8 percent from the month before, according to preliminary data from the Bank of Korea (BOK).

M2 is a measure of the money supply that counts the currency in circulation, including bank debentures and deposits with a maturity of less than two years, along with stock investments. It is a key economic indicator closely monitored by the authorities.

In September, the country's M2 added some 19.4 trillion won or 0.7 percent from the previous month.

From a year earlier, however, the country's M2 gained 7.5 percent in October, slowing from a 7.6 percent on-year gain the month before.

Money held by local households and nonprofit organizations added 8.1 trillion won from a month earlier in October, while the money held by local businesses gained 6.3 trillion won over the cited period.

Funds held by financial institutes also increased by 6.3 trillion won.

The steady increase in liquidity apparently follows two rounds of rate cuts this year by the central bank.

The BOK cut the key rate to 1.50 percent in July, marking its first rate reduction in three years. It again lowered the base interest rate to 1.25 percent in October, matching the all-time low that was previously seen only once in 2016.

S. Korea's money supply continues to grow in Oct. - 1


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