South Korea’s money supply rose 0.7 percent month-on-month in December, mainly due to an increase in savings spurred by higher interest rates and strong exports, it showed on Thursday. central bank data.
The country’s M2, a key indicator of money supply, averaged 3.613 trillion won ($3.02 trillion) in December, up 23.8 trillion won from the previous month, according to data. preliminary data from the Bank of Korea (BOK).
The growth rate slowed in December compared to the previous month. Compared to a year earlier, however, the money supply jumped 13.2%, the fastest since November 2008, the BOK said.
M2 is a measure of money supply that counts cash, demand deposits, and other readily convertible financial instruments.
This increase is attributable to the increase in deposits in financial institutions, supported by higher interest rates, as well as government money disbursements in the context of the COVID-19 pandemic.
Savings rates have risen alongside hikes in the central bank’s policy rates in recent months as it seeks to tighten its accommodative monetary policy to tame inflation.
Export growth has also boosted corporate money supply, according to the BOK.
The country’s outbound shipments hit a monthly high of $60.74 billion in December, the 14th consecutive month that exports have extended their gains. (Yonhap)