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Money supply down in March amid tightening policy: BOK

Economy 12:00 May 12, 2023

SEOUL, May 12 (Yonhap) -- South Korea's money supply decreased in March largely due to aggressive monetary tightening, central bank data showed Friday.

The country's M2, a key gauge of the money supply, stood at 3,810.4 trillion won (US$2.86 trillion) in March, down 9.1 trillion won, or 0.2 percent, from a month earlier, according to the preliminary data from the Bank of Korea (BOK).

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

In February, the nation's M2 increased 0.3 percent.

The BOK attributed the money supply fall in March to a decrease in on-demand bank deposits.

The central bank held its key rate steady at 3.5 percent last month after a rate freeze in February as inflation appears to be easing and concerns are rising over an economic slowdown.

The central bank is scheduled to hold its monetary policy meeting later this month and may face a daunting task of whether to freeze the rate again or raise it.

The bank is expected to stand pat again amid easing inflation and a slowdown in economic growth.

Money supply down in March amid tightening policy: BOK - 1


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