Money supply continues to rise in Aug. on short-term deposits

South Korea's money supply continued to grow in August, as per central bank data released on Thursday. The main reason behind this growth was the rise in short-term deposits and money trusts, according to the Bank of Korea (BOK). The country's M2, a key indicator of the money supply, averaged 4,266.8 trillion won ($3.18 trillion) in August, marking a 0.9 percent increase, or 39.1 trillion won, compared to the previous month.

This upward trend has been consistent since November. M2 is a measurement of the money supply that encompasses cash, demand deposits, and other readily convertable financial instruments. The BOK highlighted that the increase in August was primarily due to a rise in short-term deposits and money trusts with maturities of less than two years.

In terms of sector-wise distribution, the liquidity held by nonfinancial corporations surged by 33.9 trillion won, while the liquidity held by households and nonprofit organizations grew by 0.3 trillion won. Additionally, the liquidity maintained by financial institutions also saw an increase of 1 trillion won.