Seoul - South Korea's major lenders continue to have a stable money supply, even with a minor decrease in deposits.
According to Yonhap News Agency, The FSS had anticipated a significant decline in funds managed by local banks, owing to high maturing savings on elevated interest rates, potentially impacting lower-income households. However, won-denominated deposits at banks stood at 2,055.2 trillion won (US$1.59 trillion) as of the end of October, only slightly down by 0.45 percent from the previous month. Deposits at non-bank institutions, like savings banks and credit unions, also showed a minor decrease.
The FSS attributed the recent drop in savings banks' deposits to proactive measures taken by the banks between July and September to boost their money supply ahead of an expected rise in deposit rates in the fourth quarter. Despite a modest increase from the previous month, deposit rates at savings banks in October were significantly lower compared to the same period last year. The FSS reassured that the current liquidity levels minimize the risk of liquidity shortage issues, potentially enhancing the profitability of savings banks by lowering financing costs. A real-time monitoring system was launched by the FSS to track changes in deposits, ensuring swift action to address any potential problems.