South Korea’s money supply growth accelerates in OctoberDecember 7th, 2011 - 1:31 pm ICT by IANS
Seoul, Dec 7 (IANS) South Korea’s money supply growth continued its upward trend in October due to a base effect, the central bank said Wednesday.
The country’s M2, so-called broad money, expanded 4.4 percent in October from a year earlier, faster than a 4.2 percent on-year gain tallied the previous month, according to the Bank of Korea (BOK).
The October figure was the fastest since June when it fell to the seven-year low of 3 percent. The broad money growth continued its upward trend for four straight months in October.
“The M2 growth has trended down since 2008, and this trend continued this year. But, the money growth showed a picture of gradual growth in recent months in response to the low base effect,” an official at BOK told Xinhua.
The on-year growth rate of M1, dubbed as narrow money, registered 4 percent in October, down from a 5.1 percent on-year expansion a month before due to a slower growth in the balance of savings account.
The M1 covers currency in circulation and demand deposits equivalent to cash, while the M2 adds financial products that mature in less than two years such as deposits and financial bonds to M1.
Liquidity of financial institutions, also called Lf, advanced 6.1 percent on-year in October, up from 5.7 percent tallied in September.
The on-year growth of the liquidity aggregate, the broadest measure of money supply, was unchanged at 8.9 percent in October, according to the BOK.
The Lf covers financial products with a maturity of more than two years and liquidity at insurers and brokerage houses along with the M2, while the liquidity aggregate adds state and corporate bonds to the Lf.
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Tags: aggregate, bok, brokerage houses, circulation, corporate bonds, currency, demand deposits, financial bonds, financial institutions, liquidity, m1, m2, maturity, money growth, money supply growth, narrow money, seoul, south korea, upward trend, xinhua