September Market Money Supply Up 9.2% Year-on-Year to 3,115.8 Trillion

[Asia Economy Reporter Kim Eunbyeol] Amid the ongoing low-interest-rate environment in response to the COVID-19 pandemic, the money supply in the market continues to grow rapidly.

According to the "Monetary and Liquidity" report released by the Bank of Korea on the 13th, the broad money supply (M2) in September increased by 9.2% compared to the same month last year. The seasonally adjusted average balance of M2 reached 3,115.8 trillion won. Although the growth rate decreased from the previous month (9.5%), it still maintains a steep increase above 9%.

M2 is a broad monetary indicator that includes cash readily convertible at any time, demand deposits, savings deposits with flexible withdrawal, money market funds (MMF), and time deposits and savings deposits with a maturity of less than two years.

In September, M2 increased by 0.5% compared to the previous month. By product, transaction deposits such as demand deposits (11.6 trillion won) and savings deposits with flexible withdrawal (9.2 trillion won) mainly increased. On the other hand, MMFs (-5.5 trillion won) and beneficiary certificates (-5.1 trillion won) decreased.

By economic agents, corporations increased the most by 8.7 trillion won, followed by other financial institutions (2.5 trillion won) and other sectors (2.1 trillion won). Households and nonprofit organizations decreased by 3.5 trillion won.

The narrow money supply (M1), which refers to cash that can be used immediately, increased by 25.1% compared to the same month last year, continuing a growth rate in the 20% range for four consecutive months.

This content was produced with the assistance of AI translation services.