March Call Volume Decreases by 4.1 Trillion Won... First Time in 3 Years and 6 Months

(Data provided by Bank of Korea)

Due to the rise in market interest rates, the amounts in money trusts and money market funds (MMFs) decreased, leading to a reduction of approximately 4 trillion won in the money supply in March.

According to the 'Money and Liquidity' statistics released by the Bank of Korea on the 12th, the average broad money supply (based on M2) in March was 3,658.5 trillion won, down 4.1 trillion won (-0.1%) from the previous month. This marks the first decline since September 2018 (-0.1%).

The broad money supply indicator M2 includes cash, demand deposits, and checking deposits (all part of M1), as well as money market funds (MMFs), time deposits under two years, installment savings, beneficiary certificates, certificates of deposit (CDs), repurchase agreements (RPs), financial bonds under two years, and money trusts under two years?short-term financial products that can be quickly converted into cash.

By product, time deposits and installment savings increased by 8.2 trillion won, and beneficiary certificates rose by 5.6 trillion won, but money trusts decreased by 10.5 trillion won and MMFs by 8.9 trillion won due to the impact of rising interest rates.

Looking at economic agents, households and non-profit organizations increased their deposits by 15.2 trillion won, mainly in time deposits and installment savings, following the rise in deposit interest rates. Corporations increased by 12.1 trillion won, driven by continued loan growth to small and medium-sized enterprises. On the other hand, other financial institutions saw a significant decrease of 23.3 trillion won.

The year-on-year growth rate of M2 (based on the original series average balance) was 10.8%, down from 11.8% in the previous month.

The narrow money supply, M1, which includes only cash, demand deposits, and checking deposits, was 1,358.9 trillion won, up 0.4% from the previous month. The year-on-year growth rate was 11.3%, continuing a downward trend since February last year (26.0%).

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