The Sparkling Effect of 'Disaster Relief Funds'... Market Money Supply Increased by 39.4 Trillion Won in November

Bank of Korea Announces 'Monetary and Liquidity Conditions in November 2021'

On the 6th, when the payment procedure for the COVID-19 mutual aid national support fund (disaster relief fund) began, a notice indicating the availability of emergency disaster relief fund usage was posted at a store in a traditional market in Mapo-gu, Seoul. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Jang Sehee] The amount of money circulating in the market increased by 39.4 trillion KRW in November. Although the increase in loans slowed down, the amount of money in circulation grew again due to the distribution of disaster relief funds.

On the 12th, the Bank of Korea announced in its 'Monetary and Liquidity in November 2021' report that the broad money supply (M2, average balance basis) as of October stood at 3,589.1 trillion KRW, up 39.4 trillion KRW (1.1%) from the previous month. The year-on-year growth rate was 12.9%, maintaining a double-digit increase since January this year.

Broad money supply includes narrow money (M1), which consists of cash, demand deposits, and savings deposits with frequent withdrawals, plus money market funds (MMF), time deposits and installment savings under two years, financial bonds, money trusts, beneficiary certificates, negotiable certificates of deposit (CD), repurchase agreements (RP), and commercial paper.

The Bank of Korea explained the increase in market liquidity by stating, "Although the growth in housing-related loans has slowed, the effect of disaster relief fund payments and increased sales of alternative assets such as stocks contributed to the rise."

By financial product, time deposits and installment savings increased by 13.9 trillion KRW, financial bonds and beneficiary certificates rose by 6.1 trillion KRW and 5.3 trillion KRW respectively.

By economic agents, households and non-profit organizations increased by 17.2 trillion KRW. Other financial institutions also increased by 19.4 trillion KRW. Corporations increased by 14.5 trillion KRW, influenced by financial support for small and medium-sized enterprises.

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