In June, South Korea's money supply increased by nearly 30 trillion won, continuing an upward trend for the eighth consecutive month. This rise is attributed to an increase in surplus funds, leading to greater short-term funding demand from corporations.
According to the Bank of Korea's 'Money and Liquidity' statistics released on August 14, the average broad money supply (M2) for June was 4,213 trillion won, up 29.4 trillion won (0.7%) from the previous month. This marks an increase of 237 trillion won (6.0%) compared to June of last year.
The M2 money supply, which includes cash, demand deposits, and checking accounts (M1), as well as money market funds (MMF), time deposits and savings accounts with maturities of less than two years, certificates of deposit (CD), repurchase agreements (RP), financial bonds with maturities of less than two years, and short-term financial products that can be quickly converted to cash.
Breaking it down by financial products, the money market fund (MMF) saw an increase of 7.3 trillion won due to the expansion of short-term surplus fund management by non-financial corporations. Time deposits and savings accounts with maturities of less than two years also increased by 7.1 trillion won as corporate holdings rose.
By economic sector, non-financial corporations saw an increase of 45.7 trillion won, and other financial institutions increased by 5.4 trillion won. In contrast, households and non-profit organizations decreased by 19.8 trillion won, and other sectors saw a decline of 1.1 trillion won.
The narrow measure of money supply, M1 (1,402.9 trillion won), which includes only cash, demand deposits, and checking accounts, increased by 0.4% from the previous month. The liquidity of financial institutions (Lf) also rose by 1.0% to 6,368.7 trillion won.
* This article has been translated by AI.
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