South Korea’s money supply growth unchanged in November 2011

Seoul, Jan 12 (IANS) South Korea’s money supply growth stayed unchanged in November last year, the central bank said Thursday.

The country’s M2, so-called broad money, expanded 4.4 percent in November from a year earlier, unchanged from a 4.4 percent on-year growth tallied in the previous month, according to the Bank of Korea (BOK).

The M2 growth had trended down since 2008, but the money supply showed a picture of gradual growth in recent months in response to the low base effect. The M2 growth rate continued to rise over the last five months after falling to the seven-year low of 3 percent in June, reported Xinhua.

Meanwhile, the on-year growth rate of M1, dubbed as narrow money, registered 2 percent in November, down from 4.1 percent a month before due to slower growth in the balance of savings account.

The M1 covers currency in circulation and demand deposits equivalent to cash, while the M2 adds financial products that mature in less than two years such as deposits and financial bonds to M1.

Liquidity of financial institutions advanced 6.2 percent on-year in November, up from 6.1 percent tallied in October.

The on-year growth of the liquidity aggregate, the broadest measure of money supply, was unchanged at 8.9 percent in November, according to the BOK.