Is South Korea's Money Supply Rising Amid a Strong Stock Market?
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Synopsis
South Korea's money supply continues to climb, marking the sixth consecutive month of growth. Driven by an influx of investment funds amid a thriving stock market, the latest figures from the Bank of Korea reveal significant increases in various financial metrics. Discover how these trends are shaping the country's economy and the implications for future investments.
Key Takeaways
- South Korea's M2 increased for the sixth month in a row.
- The M2 reached 4,430.5 trillion won in September.
- Investment trust funds rose by 5.7 trillion won.
- Demand deposits increased by 9.5 trillion won.
- Discussions on AI and semiconductor strategies are underway.
Seoul, Nov 12 (NationPress) South Korea's money supply has seen a rise for the sixth consecutive month as of September, fueled by an influx of investment-related funds amidst a robust domestic stock market, as revealed by data from the central bank on Wednesday.
The M2, an essential metric of the money supply, reached 4,430.5 trillion won (approximately US$3.02 trillion) in September, marking an increase of 0.7 percent from the previous month, according to preliminary figures from the Bank of Korea (BOK), as reported by Yonhap news agency.
This figure has shown a steady rise since April and represents an 8.5 percent surge compared to the same month last year.
The M2 measure includes cash, demand deposits, and other financial instruments that can be quickly converted to cash.
In September, investment trust funds rose by 5.7 trillion won from the prior month, while demand deposits surged by 9.5 trillion won, more than doubling the 3.7 trillion-won increase recorded in August.
Additionally, installment and savings deposits with flexible withdrawal options rose by 6.8 trillion won.
A BOK official stated, "The increase is indicative of balance sheet management at the end of the quarter, along with the influx of funds seeking investment opportunities."
An official was seen inspecting 50,000 won banknotes at Hana Bank's counterfeit response center in Seoul, as seen in a file photo taken on July 17, 2024. (Yonhap)
In related news, the Ministry of Trade, Industry and Resources convened its first policy consultation meeting under President Lee Jae Myung on Wednesday, discussing South Korea's vital economic agenda, which includes the AI transformation of the manufacturing sector and enhancing trade competitiveness, with government officials and experts.
The discussions also touched on Korea's recent tariff agreement with the United States and strategies to advance the nation's semiconductor industry, according to the ministry.
The meeting was attended by 26 experts in fields such as AI, economic security, finance, trade, and resources, alongside numerous government officials.
Industry Minister Kim Jung-kwan remarked during the meeting, "As uncertainties surrounding our economy have eased somewhat with the trade deal with the U.S., we must now focus our efforts on strengthening the fundamental competitiveness of our industries."
Point of View
The consistent rise in South Korea's money supply underscores a resilient economy adapting to changing market dynamics. The inflow of investment funds points towards increased confidence among investors, while ongoing discussions among government officials and experts highlight the need for strategic advancements in key sectors like AI and semiconductors. As the nation navigates these economic currents, the focus remains on bolstering competitiveness and ensuring sustainable growth.
NationPress
12/11/2025
Frequently Asked Questions
What is the current state of South Korea's money supply?
South Korea's money supply has increased for the sixth straight month, reaching 4,430.5 trillion won in September.
What factors are driving the rise in money supply?
The growth is primarily driven by an influx of investment-related funds due to a strong domestic stock market.
How does the M2 measure of money supply work?
M2 includes cash, demand deposits, and other easily convertible financial instruments.
What was the increase in demand deposits in September?
Demand deposits rose by 9.5 trillion won in September, more than doubling the previous month's increase.
What are the implications of the rising money supply for investors?
The rising money supply suggests increased economic activity and investment opportunities, indicating a potentially favorable environment for investors.
