June Money Supply 3412 Trillion Won 'Continued Liquidity Expansion'

Bank of Korea to Announce 'June 2021 Monetary and Liquidity' on 12th
Household and Corporate Liquidity Expansion Continues... Other Financial Institutions Decrease by 4.6 Trillion

[Asia Economy Reporter Jang Sehee] As liquidity expansion continues in the private sector, including households and businesses, the money supply in June reached 3,411.8 trillion won.

According to the 'June 2021 Money and Liquidity' report released by the Bank of Korea on the 12th, the broad money supply (M2, seasonally adjusted, average balance basis), which represents the circulating money supply, stood at 3,411.8 trillion won in June, an increase of 26.8 trillion won (0.8%) from the previous month (3,385 trillion won).

The year-on-year M2 growth rate (based on the original series average balance) was 10.9%, slightly down from 11.0% in the previous month. The year-on-year M2 growth rate has been on an upward trend since September 2017, but after reaching the highest growth rate of 11.4% in April, the upward trend slightly slowed in May.

By financial product, demand deposits increased significantly by 11.2 trillion won. Time deposits and savings certificates under two years also rose by 8.3 trillion won and 5.2 trillion won, respectively.

By economic agent, households and non-profit organizations increased by 14.3 trillion won. In this regard, the Bank of Korea explained that this was due to increased loan demand related to housing sales and jeonse (long-term lease) transactions.

Businesses also increased by 7.9 trillion won. This was analyzed to be influenced by increased loans to small and medium-sized enterprises, as well as growth in corporate bond issuance and paid-in capital increases.

Other financial institutions decreased by 4.6 trillion won. This was due to the gradual withdrawal of funds related to public offering subscriptions, which had flowed in massively at the end of April.

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