September Market Liquidity Increases by 18 Trillion Won... Four Consecutive Months of Growth

The Bank of Korea, 'Monetary and Liquidity' Statistics

In September, the money supply increased by 18.1 trillion won compared to the previous month, marking the fourth consecutive month of growth.

According to the "September Money Supply and Liquidity" report released by the Bank of Korea on the 14th, the broad money supply (M2, seasonally adjusted series, average balance) in September was 3,847.6 trillion won, up 18.1 trillion won or 0.5% from the previous month. This increase was larger than the 0.2% growth in August. M2 includes narrow money (M1), which consists of cash, demand deposits, and checking deposits, as well as money market funds (MMF), time deposits and savings deposits under two years, and marketable securities that can be converted into cash at any time.

The money supply had declined for three consecutive months from March to May but rebounded in June and has continued to increase since. The year-on-year growth rate (based on the original series) also rose to 2.5%, up from 2.2% in the previous month.

By product, marketable securities increased by 9.4 trillion won, mainly driven by derivative funds such as interest rate-linked ETFs and bond funds. MMFs (+8.1 trillion won) and demand savings deposits (+3.6 trillion won) turned to growth as investment standby funds increased amid cautious sentiment in the stock market and expectations of rising interest rates. Market-type products increased by 3.4 trillion won, centered on negotiable certificates of deposit, due to financial institutions' efforts to raise funds.

By economic agents, households and non-profit organizations increased by 16.9 trillion won, mainly in demand deposits, and other financial institutions increased by 6 trillion won, mainly in marketable securities, while corporations (+1 trillion won) and other sectors maintained their levels from the previous month.

M1, which refers to "cash" that can be used immediately, was 1,184.9 trillion won in September, down 1.2 trillion won from the previous month due to a decrease in demand deposits, but the decline was smaller than the 2.8 trillion won decrease in the previous month. M1 had decreased continuously for 13 months, the longest period on record since June last year, before turning to an increase in July. However, it reverted to a decrease after one month and continued to decline in September. Compared to the same month last year, it decreased by 10%, marking 13 consecutive months of decline.

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