SEOUL (XINHUA) – South Korea’s money supply growth hit a 53-month high in March amid the record-low policy rate, central bank data showed yesterday.
The M2, called broad money, advanced 8.4 per cent in March from a year earlier, after expanding 8.2 per cent in the previous month, according to the Bank of Korea (BOK).
It was the fastest expansion in 53 months since October 2015. The money supply growth came as the BOK slashed its target rate by 50 basis points to an all-time low of 0.75 per cent in March.
The M1, dubbed narrow money, jumped 14.6 per cent in March from a year earlier, after advancing 12.0 per cent in February.
The M1 refers to the currency in circulation, demand deposit, transferable savings deposit equivalent to cash. The M2 adds money market funds, time deposit and financial products that mature in less than two years to M1.
The liquidity of financial institutions, called Lf, increased 8.3 per cent in the cited month. The year-over-year growth of liquidity aggregate, the broadest measure of money supply, was 7.5 per cent.
The Lf includes financial products with a maturity of more than two years and liquidity at insurers and brokerages along with M2. The liquidity aggregate adds state and corporate bonds to the Lf.