S. Korea's money supply grows quickly in June

SEOUL, Aug. 13 (Yonhap) -- South Korea's money supply continued to grow at a fast clip in June as households and firms rushed to secure funds amid the coronavirus pandemic, central bank data showed Thursday.

The country's M2 stood at 3,077.1 trillion won (US$2.6 trillion) as of end-June, up 0.8 percent, or 23.2 trillion won, from May, according to preliminary data by the Bank of Korea (BOK).

From a year earlier, M2 surged 9.9 percent, the highest on-year increase since data tracking began in December 2001.

A key economic indicator closely monitored by authorities, M2 is a measure of the money supply that counts cash, demand deposits and other near money that is easily convertible to cash.

The BOK said M2 kept rising at a fast pace in June as households and companies took out large amounts of bank loans amid the prolonged economic impact from the COVID-19 outbreak and low interest rates.

Funds held by households and nonprofit organizations increased by 16.9 trillion won in June from the previous month, with those held by businesses rising by 9.1 trillion won.

South Korea's corporate earnings and household income have taken a big hit from the coronavirus outbreak that has sent consumer spending and exports, the country's twin growth engines, tumbling.

The BOK conducted two rate cuts in less than three months after the country confirmed its first coronavirus case on Jan. 20, sending the policy rate to a record low of 0.5 percent.

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