Money supply grows in January over increased savings

SEOUL– South Korea’s money supply grew 0.9 percent on-month in January thanks to an increase in savings bolstered by rising interest rates, central bank data showed Thursday.

The country’s M2, a key gauge of the money supply, stood at 3,653.4 trillion won (US$2.98 trillion) on average in January, up from 3,619.6 trillion tallied a month earlier, according to the preliminary data from the Bank of Korea (BOK).

The growth rate slightly quickened from December when the money supply gained 0.7 percent on-month. From a year earlier, the money supply jumped 13.1 percent.

M2 is a measure of the money supply that counts cash, demand deposits and other easily convertible financial instruments.

The BOK attributed the January rise to increased deposits at financial institutions boosted by rising interest rates.

Banks have raised interest rates on savings in line with the central bank’s recent rate hikes aimed at taming inflation.

The BOK has hiked its key policy rate three times since August last year, including the latest quarter percentage point increase in January.

Source: Yonhap News Agency

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