South Korea's Money Supply Continues to Climb Amid Market Fluctuations: BOK
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Synopsis
In December, South Korea's money supply grew for the 19th month in a row, reaching 4,183.5 trillion won. This increase is attributed to heightened market volatility and demand deposits. The country's liquidity aggregate also expanded, reflecting corporate financial strategies.
Key Takeaways
- M2 money supply reached 4,183.5 trillion won.
- Year-on-year increase of 6.9% in December.
- Demand deposits surged by 18.6 trillion won.
- Liquidity aggregate rose to 7,106 trillion won.
- Stocks showed gains led by tech and auto sectors.
Seoul, Feb 13 (NationPress) The money supply in South Korea increased for the 19th consecutive month in December, reflecting a rise in short-term funds amidst significant market fluctuations, as revealed by central bank data on Thursday.
The M2, a crucial indicator of money supply, reached 4,183.5 trillion won ($2.87 trillion) in December, marking a 1 percent increase from the previous month, according to preliminary data from the Bank of Korea (BOK).
This upward trend in the money supply has persisted since June 2023, as reported by Yonhap news agency.
On a year-on-year basis, the money supply rose by 6.9 percent in December, compared to a 6.4 percent increase in November.
The M2 metric encompasses cash, demand deposits, and other financial instruments that can be readily converted.
The rise was driven by an increase in demand deposits, which surged by 18.6 trillion won amid heightened asset market volatility, according to officials from the BOK.
Additionally, corporate funds required to maintain financial ratios at year-end contributed to this growth in demand deposits.
South Korea's aggregate liquidity, the broadest measure of money supply, saw a slight increase of 0.2 percent from the previous month, reaching 7,106 trillion won in December, the data indicated.
In the meantime, South Korean stocks showed gains late Thursday morning, buoyed by advancements in the tech and automotive sectors, fueled by optimism regarding potential exemptions from U.S. tariffs.
The benchmark Korea Composite Stock Price Index (KOSPI) rose by 22.03 points, or 0.86 percent, to 2,570.42 as of 11:20 a.m.
The index opened positively and continued to climb on strong institutional buying.
U.S. stocks closed mixed on Wednesday, with robust inflation data raising speculation about the Federal Reserve delaying interest rate cuts.
In Seoul, market leader Samsung Electronics gained 0.18 percent, while chip manufacturer SK hynix soared by 1.81 percent.
Leading battery producer LG Energy Solution rose by 3.1 percent.
