August Call Volume Up 8.8 Trillion Won from Previous Month... Three Consecutive Months of Increase

Bank of Korea, 'Monetary and Liquidity' Statistics
Increase in Regular Savings and Market-Based Products

In August, the money supply increased by 8.8 trillion won compared to the previous month, marking the third consecutive month of growth.

According to the 'Money and Liquidity' statistics released by the Bank of Korea on the 17th, the average broad money supply (M2 basis) in August was 3,829.6 trillion won, an increase of 8.08 trillion won (0.2%) from the previous month.

The money supply had shown a decline for three consecutive months from March to May but rebounded in June and has continued to increase since. However, the year-on-year growth rate fell to 2.2% from 2.5% in the previous month.

The broad money supply indicator M2 includes cash, demand deposits, and checking deposits (all part of M1), as well as money market funds (MMF), time deposits under two years, installment savings, beneficiary certificates, certificates of deposit (CD), repurchase agreements (RP), financial bonds under two years, and money trusts under two years?short-term financial products that can be quickly converted into cash.

By product, time deposits and installment savings increased by 7.7 trillion won, market-type products by 4.3 trillion won, beneficiary certificates by 2.8 trillion won, and financial bonds by 1.8 trillion won, while money trusts decreased by 2.9 trillion won and checking savings deposits decreased by 2.6 trillion won.

Time deposits and installment savings rose due to inflows of machinery funds and active corporate fund attraction by some banks, while market-type products increased as financial institutions' funding demand grew amid the maturity of high-interest time deposits in the fourth quarter.

Beneficiary certificates increased mainly due to bond-type funds, and financial bonds turned to an increase as bank bonds shifted to net issuance.

Money trusts continued to decline for the 12th consecutive month due to a contraction in the trust market, and checking savings deposits turned to a decrease as settlement funds that had flowed in the previous month were withdrawn.

By economic agents, corporations increased by 9 trillion won, other financial institutions by 3.6 trillion won, and other sectors by 1.6 trillion won, while households and non-profit organizations decreased by 200 billion won.

The narrow money supply M1, which includes only cash, demand deposits, and checking deposits, stood at 1,186.1 trillion won in August, decreasing by 2.8 trillion won from the previous month as both demand deposits and checking savings deposits declined. This marks a return to a decrease after one month. Compared to the same month last year, it fell by 11.2%, showing a decline for 12 consecutive months.