Korea's money supply growth hits 10-month high in December

By 정주원
  • Published : Feb 12, 2014 - 12:48
  • Updated : Feb 12, 2014 - 13:29

South Korea's money supply grew at the fastest pace in 10 months in December due to an increase in bank lending, the central bank said Wednesday.

South Korea's M2, a narrow measure of the money supply, rose 5.3 percent to 1,932 trillion won ($1.812 trillion) in December from a year earlier, accelerating from a 5.1 percent on-year gain in November, according to the Bank of Korea.

It marked the fastest on-year gain since February of last year when the money supply grew an identical 5.3 percent.

On a seasonally-adjusted basis, the country's M2 advanced 0.4 percent in December from the previous month, the same pace as recorded in November.

The M2 covers currency in circulation and all types of deposits with a maturity of less than two years at lenders and non-banking financial institutions, excluding those held by insurers and brokerage houses.

The BOK said that the growth of the country's M2 is estimated to have risen to the low-5 percent range in January.

South Korea's liquidity aggregate, the broadest measure of the money supply, grew 7.1 percent in December from a year ago, after gaining 7.4 percent on-year in November, it added.

The liquidity aggregate covers currency in circulation and all types of deposits at financial institutions, plus state and corporate bonds.

The data came one day before the BOK is scheduled to hold its monthly rate-setting meeting. Analysts said that the BOK is likely to freeze the key rate at 2.5 percent for the ninth straight month in February. (Yonhap)