S. Korea's Money Supply Growth Hits 3.5-year High In September

South Korea's money supply growth hit the highest in three and a half years in September after the policy rate cut, central bank data showed Wednesday

SEOUL, (UrduPoint / Pakistan Point News - 13th Nov, 2019 ):South Korea's money supply growth hit the highest in three and a half years in September after the policy rate cut, central bank data showed Wednesday.

The M2, called broad money, expanded 7.6 percent in September from a year earlier, after rising 6.8 percent in the previous month, according to the Bank of Korea (BOK).

It was the fastest increase since March 2016 as the BOK lowered its benchmark interest rate by 25 basis points to 1.50 percent in July. The central bank cut it further to a record low of 1.25 percent in October.

The M1, dubbed narrow money, was up 5.0 percent in September, after growing 4.

7 percent in August.

The M1 refers to the currency in circulation, demand deposit, transferable savings deposit 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 8.4 percent in the cited period. The year-on-year increase of liquidity aggregate, the broadest measure of money supply, was 7.2 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.