S.Korea’s money supply growth hits record high in February

SEOUL, April 13 (Xinhua) -- South Korea’s money supply growth hit a record high in February on the back of strong money demand from both companies and households, central bank data showed Tuesday.

The M2, or broad money, stood at 3,274.4 trillion won (2.9 trillion U.S. dollars) in February, up 41.7 trillion won (37 billion U.S. dollars) from a month earlier, according to the Bank of Korea (BOK).

It was the biggest monthly increase since relevant data began to be compiled in December 2001.

The record-high expansion came as an economic fallout from the COVID-19 pandemic raised money demand from both companies and households.

From a year earlier, the M2 advanced 10.7 percent in February, marking the highest since March 2009.

The M1, or narrow money, surged 26.0 percent in February from a year ago.

The M1 refers to currency in circulation, demand deposit and transferable savings deposit equivalent to cash. The M2 adds money market fund, time deposit and financial products that mature in less than two years to M2.

The liquidity on financial institutions, called Lf, gained 8.9 percent in the cited month. The year-over-year expansion of liquidity aggregate, the broadest measure of money supply, was 8.9 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.