SEOUL, July 12 (Yonhap) — South Korea’s money supply rose for the second consecutive month in May on higher deposits amid rising interest rates, central bank data showed on Tuesday. .
According to preliminary data from the Bank of Korea (BOK).
Money supply increased for the second consecutive month in May after registering the first contraction since September 2018 in March. May’s rise also marked the largest monthly increase so far this year.
M2 is a measure of money supply that counts cash, demand deposits, and other readily convertible financial instruments.
May’s increase was mainly driven by higher deposits amid rising interest rates in line with the BOK’s monetary tightening.
Time deposits increased by 21 trillion won in a month and demand deposits increased by 7.4 trillion won in May, the data showed.
In May, the BOK raised the policy rate by a quarter of a percentage point to 1.75%, the fifth increase in borrowing costs since August last year, in a bid to rein in inflation.
Compared to a year earlier, M2 rose 9.3% in May, slowing from a monthly rise of 9.4% in April.