South Korea's Money Supply Rose in April on Deposits, Investment Funds
Quick Look
South Korea's M2 money supply increased by 0.6% in April to an average of 4,153.9 trillion won, driven by rising short-term deposits and funds awaiting investment amid a stock market rally, according to the Bank of Korea.
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Why It Matters
South Korea's money supply, measured by M2, has been steadily increasing since November, reflecting economic activity.
SEOUL, June 16 (Yonhap) -- South Korea's money supply continued to rise in April on an increase in short-term deposits and funds awaiting investment, central bank data showed Tuesday.
The country's M2, a key gauge of the money supply, stood at an average of 4,153.9 trillion won (US$2.74 trillion) in April, up 0.6 percent, or 25.3 trillion won, from a month earlier, according to the preliminary data from the Bank of Korea (BOK).
The figure has been on a steady rise since November.
M2 is a measure of the money supply that includes cash, demand deposits and other easily convertible financial instruments.
The BOK attributed the April gain to increases in short-term deposits and money market funds that mostly invest in short-term products amid a rally in the local stock market.
By sector, liquidity declined 0.6 trillion won among financial institutions, while nonfinancial corporations and households saw their liquidity rise 7 trillion won, the data showed.
Open Questions
- What is the outlook for money supply growth in the coming months?
- How will this trend impact inflation?
