SEOUL, Feb. 13 (Xinhua) -- Money supply growth in South Korea hit the lowest in four years last year as the central bank began raising its benchmark interest rate, Bank of Korea (BOK) data showed Tuesday.
The M2, called broad money, grew 128.6 trillion won (118.5 billion U.S. dollars), or 5.5 percent, in 2017 from a year earlier, according to the BOK data. It marked the lowest yearly expansion since 2013.
The M2 growth rate continued to fall from 8.6 percent in 2015 to 7.3 percent in 2016 as the BOK raised its policy rate in late November to 1.5 percent from an all-time low of 1.25 percent, the first rate hike in almost six and a half years.
The M1, dubbed narrow money, gained 9.2 percent in 2017 from the previous year.
The M1 refers to currency in circulation, demand deposits and transferable savings deposits equivalent to cash. The M2 adds money market funds, time deposit and financial products that mature in less than two years to M1.
Liquidity of financial institutions, called Lf, increased 7.6 percent in the cited period. The year-on-year expansion of liquidity aggregate, the broadest measure of money supply, was 6.3 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.
