POST TIME: 13 September, 2018 00:00 00 AM
S Korea’s money supply hits 18-month high

S Korea’s money supply hits 
18-month high

Money supply growth in South Korea hit an 18-month high in July on continued rise of corporate lending, central bank data showed yesterday, reports Xinhua from Seoul.

The M2, called broad money, rose 6.7 per centin July from a year earlier, marking the fastest increase since January last year, according to the Bank of Korea (BOK).

Household debt growth slowed down on the

government’s measures to control speculative investment in the real estate market, but corporate lending kept rising amid the near-record-low borrowing costs.

The BOK refrained from altering the benchmark rate since the bank raised it to the current level of 1.50 per centin November last year from an all-time low of 1.25 percent.

The M1, dubbed narrow money, grew 4.8 per centin July from a year earlier.

The M1 refers to currency in circulation, demand deposits and transferable savings deposits equivalent to cash.

The M2 adds money market funds, time deposits and financial products that mature in less than two years to M1.

Liquidity of financial institutions, called Lf, increased 7.1 per centin the cited period.

The year-over-year expansion of liquidity aggregate, the broadest measure of money supply, was 6.2 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.