Money supply up in Nov. on more bank deposits amid high interest rates

SEOUL, Jan. 17 (Yonhap) -- South Korea's money supply grew on-month in November, as high interest rates encouraged people to deposit more money at banks, central bank data showed Tuesday.

The country's M2, a key gauge of the money supply, stood at 3,785.3 trillion won (US$3.05 trillion) on average in November, up 0.7 percent from a month earlier, according to the preliminary data from the Bank of Korea (BOK).

From a year earlier, the amount also rose 5.4 percent.

M2 is a measure of the money supply that counts cash, demand deposits and other easily convertible financial instruments.

The growth came as banks' time deposits jumped 58.4 trillion won on-year, bolstered by rising interest payments amid the BOK's rate hikes to curb inflation.

It is the largest growth since related data began to be compiled in December 2001.

Last week, the central bank hiked the benchmark interest rate from 3.25 percent to 3.5 percent, the highest level since late 2008. It also marked the seventh straight rate increase since April last year, the longest span of tightening.

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