S.Korea's money supply growth hits 4-month low on falling household debt

Source: Xinhua| 2019-03-13 15:28:10|Editor: xuxin
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SEOUL, March 13 (Xinhua) -- South Korea's money supply growth hit the lowest in four months on falling household debt, central bank data showed Wednesday.

The M2, called broad money, grew 6.5 percent in January from a year earlier, according to the Bank of Korea (BOK). It was the lowest expansion since September last year.

The slower increase came as debts owed by households to all financial institutions reduced in January from a month earlier.

However, the money supply kept rising as the BOK's policy rate stayed in the near-record level of 1.75 percent.

The M1, dubbed narrow money, added 2.1 percent in January from a year ago.

The M1 refers to the currency in circulation, demand deposit, transferable savings deposits equivalent to cash. The M2 adds money market fund, time deposit and financial products that mature in less than two years to M1.

The liquidity of financial institutions, called Lf, expanded 7.4 percent in the cited period. The year-over-year increase 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.