January Money Supply Increased by 41.8 Trillion Won... Largest Ever Growth Recorded

[Image source=Yonhap News]

[Asia Economy Reporter Kim Eun-byeol] Even after the start of the new year, private sector loans have increased significantly, causing the money supply in the market to reach an all-time high in January.

According to the "Money and Liquidity in January 2021" report released by the Bank of Korea on the 18th, the money supply (M2 average balance) in January was 3,233.4 trillion KRW, an increase of about 41.8 trillion KRW (1.3%) compared to the previous month. The increase in M2 for January is the largest since the Bank of Korea began compiling statistics in December 2001.

M2 is a broad monetary indicator that includes cash, demand deposits, and savings deposits with frequent withdrawals, as well as short-term financial products such as time deposits and installment savings with maturities under two years.

By financial product, savings deposits with frequent withdrawals increased by 15.3 trillion KRW, and MMFs also rose by 7.2 trillion KRW. By economic agent, corporations increased by 24 trillion KRW, households and non-profit organizations by 4.7 trillion KRW, and other financial institutions by 4.5 trillion KRW, showing growth across all economic agents.

Compared to January last year, M2 increased by 10.1%. This marks a return to double-digit year-on-year M2 growth rates since July last year (10.0%), reaching the highest level since October 2009 (10.5%), right after the financial crisis.

Recently, the year-on-year M2 growth rates were 9.7% in November last year and 9.8% in December last year, showing an upward trend.

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