The growth of South Korea’s money supply picked up in September from the previous month as bank lending to companies expanded and the current account surplus widened, the central bank said Thursday.
The country’s M2, a narrow measure of the money supply, reached 1,729.5 trillion won ($1.52 trillion) in September, up 4.2 percent from a year earlier, according to the Bank of Korea.
The M2 in September quickened from the 4 percent on-year expansion tallied in August and marked the fastest growth since a 4.3 percent gain in March.
Since the M2 growth hit a seven-year low of 3 percent in June, the growth of the money supply accelerated for the third consecutive month in September, the BOK said.
The M2 covers currency in circulation and all types of deposits with a maturity of less than two years at lenders and non-banking financial institutions, excluding those held by insurers and brokerage houses.
The on-year growth of the M2 had been easing for the 12th consecutive month in June since hitting a seven-month high of 9.7 percent in June 2010, as banks were wary of extending loans amid economic uncertainty.
The BOK said in a separate statement that the country’s M2 is estimated to have grown at the mid-4 percent range in October as bank lending sharply expanded and money supply offered from outside of the country rose.
Meanwhile, liquidity provided by financial institutions grew 5.7 percent on-year to 2,243.7 trillion won in September, picking up from a 5.6 percent expansion in August, the BOK added.
The country’s liquidity aggregate, the broadest measure of the money supply, expanded 8.9 percent in September from a year earlier, up from 8.7 percent growth in August, it added.
The liquidity aggregate covers currency in circulation and all types of deposits at financial institutions and state and corporate bonds.
The data came one day before BOK policymakers are to hold their monthly rate-setting meeting. The BOK is widely expected to freeze the key interest rate at 3.25 percent for the fifth straight month on risks from the eurozone debt crisis.
(Yonhap News)
