May M2 Money Supply Increases by 21.4 Trillion to 3,385 Trillion KRW... Up 11% Year-on-Year

Bank of Korea 'Monetary and Liquidity Conditions in May 2021'

[Asia Economy Reporter Kim Eunbyeol] As credit supply to the private sector, including households and businesses, continues, the money supply increased by 21.4 trillion KRW in May. Although the increase was smaller than last month's record high increase of 50.6 trillion KRW, the upward trend in the money supply appears to be ongoing.

According to the "Monetary and Liquidity in May 2021" report released by the Bank of Korea on the 13th, the broad money supply (M2, seasonally adjusted, average balance basis), which represents the money supply in circulation, was 3,385 trillion KRW in May, up 0.6% from the previous month (3,363.6 trillion KRW). The growth rate was lower than the previous month (1.5%).

The year-on-year growth rate of M2 (average balance) has been on the rise since September 2017. The growth rate in May 2021 was 11.0%, slightly lower than the previous month (11.4%) but still maintaining an 11% growth rate.

By financial product, money market funds (MMF) increased by 4.2 trillion KRW, demand and savings deposits increased by 4.7 trillion KRW, and investment trusts increased by 6.2 trillion KRW.

By economic agent, households and non-profit organizations increased by 6.7 trillion KRW, corporations by 4.1 trillion KRW, and other financial institutions by 15.7 trillion KRW, with all major economic agents showing increases.

In households, housing and stock transactions continued, and demand for living expenses persisted due to the prolonged COVID-19 pandemic. The Bank of Korea explained that in other financial institutions, the inflow of funds for stock trading led to continued increases centered on MMF and time deposits.

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