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Money supply keeps growing in July

Economy 12:00 September 14, 2021

SEOUL, Sept. 14 (Yonhap) -- South Korea's money supply continued to expand in July on increased corporate fund-raising and household loans amid the COVID-19 pandemic, central bank data showed Tuesday.

The country's M2 stood at 3,443.9 trillion won (US$2.94 trillion) as of end-July, up 0.9 percent from a month earlier, according to preliminary data from the Bank of Korea (BOK).

From a year earlier, M2 soared 20.5 percent, the central bank said.

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 in July as companies actively sold shares and bonds amid the pandemic and financial institutions provided policy support to smaller firms.

Local households took out more bank loans to fund home transactions and "jeonse" contracts, it added.

Under South Korea's decades-old jeonse system, tenants pay a large lump-sum deposit, known as key money, to the landlord, which is then returned at the end of the rental agreement, which usually lasts two years. During the lease period, the tenants do not pay monthly rent.

Money supply keeps growing in July - 1


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