SEOUL, July 11 (Xinhua) -- South Korea's money supply rose on higher corporate lending amid the still record-low policy rate, central bank data showed Wednesday.
The M2, called broad money, gained 5.9 percent in May from a year earlier, according to the Bank of Korea (BOK).
The growth rate hovered around 6 percent in recent months as the BOK kept its benchmark rate at the near-record rate of 1.50 percent. The central bank raised it to the current level from an all-time low of 1.25 percent in November last year.
Demand for household loan weakened as banks tightened loan standard amid worry about debt-servicing burden, but corporate loans increased amid the still low borrowing costs, leading to the continued growth in money supply.
The M1, dubbed narrow money, advanced 6.2 percent in May from a year earlier.
The M1 refers to currency in circulation, demand deposits and transferable savings deposits equivalent to cash. The M2 adds money market funds, time deposits and financial products that mature in less than two years to M1.
Liquidity of financial institutions, called Lf, increased 6.6 percent in the cited period. The year-over-year expansion of liquidity aggregate, the broadest measure of money supply, was 6.7 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.
