Money supply up 1.1% in November amid increased savings

(Yonhap)

South Korea’s money supply rose in November as savings increased in part due to rising interest rates, central bank data showed on Wednesday.

The country’s M2, a key indicator of money supply, stood at 3,589.1 trillion won ($ 3.01 trillion) on average in November, up 1.1%, or 39.4 trillion. won, compared with the previous month, according to preliminary data from the Bank of Korea. (BOK).

The growth rate was the same as reported in October.

Compared to the previous year, the money supply jumped 12.9%, the fastest since the 13.1% expansion recorded in December 2008, according to the data.

The growth in money supply in November is partly explained by the increase in deposits with financial institutions supported by the rise in interest rates.

Term deposits, among others, jumped 13.9 trillion won in one month in November, the data showed.

Savings rates have risen alongside key rate hikes by the central bank in recent months as it seeks to tighten its lax monetary policy aimed at supporting the pandemic-stricken economy.

M2 is a measure of money supply that includes cash, demand deposits, and other easily convertible financial instruments. (Yonhap)

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