South Korea’s money supply kept rising for the second successive month due to higher demand for bank deposits, caused by higher interest rates, central bank data showed Wednesday.
The seasonally-adjusted M2, or broad money, rose 0.7 percent in July from a month earlier after growing 0.3 percent in the previous month, according to the Bank of Korea (BOK).
It rebounded from a reduction of 0.2 percent in March, 0.4 percent in April and 0.3 percent in May.
The BOK had left its policy rate unchanged at 3.50 percent since January, after raising it by 3.0 percentage points for the past one and a half years.
The M1, or narrow money, gained 1.1 percent in July on a monthly basis, turning around in 14 months.
The M1 refers to currency in circulation, demand deposit, and transferable savings deposit equivalent to cash. The M2 adds money market funds, time deposits and financial products that mature in less than two years.
The liquidity of financial institutions, called Lf, climbed 0.7 percent in the cited month, while the liquidity aggregate, the broadest measure of money supply, added 0.1 percent.
The Lf includes financial products with a maturity of more than two years and liquidity at insurers and brokerages along with M2. The liquidity aggregate adds state and corporate bonds to the Lf.
Source : XinHua