Increase in Regular Savings and Installment Deposits... Market Money Supply Rises for 16 Consecutive Months

Broad Money Supply (M2) Shows Continuous Growth Since June Last Year

A banner displaying deposit interest rates is attached to the exterior wall of a major bank in Seoul. Photo by Jinhyung Kang aymsdream@

As regular savings and time deposits increased, the broad money supply in the market continued its upward trend for the 16th consecutive month.

According to the 'September Money and Liquidity' data released by the Bank of Korea on the 14th, the average balance of broad money (M2) in September was 4,070.7 trillion won, an increase of 8.1 trillion won (0.2%) compared to the previous month.

M2 is a broad monetary indicator that includes narrow money (M1) such as cash, demand deposits, and savings deposits with check-writing privileges, as well as money market funds (MMF), time deposits under two years, beneficiary certificates, and repurchase agreements (RP).

M2 has been increasing for 16 consecutive months since June last year, but the growth rate slowed to the same level as the previous month (0.2%).

By product, regular savings and time deposits (8.6 trillion won) and savings deposits with check-writing privileges (7.2 trillion won) increased compared to the previous month, while market-type products (-9.0 trillion won) and money trusts (-1.5 trillion won) decreased.

The Bank of Korea explained that regular savings and time deposits increased due to banks' proactive efforts to attract deposits ahead of the large-scale maturity of time deposits in the fourth quarter. Savings deposits with check-writing privileges increased due to corporate funds inflow for financial ratio management at the end of the quarter.

Market-type products decreased mainly in negotiable certificates of deposit (CDs) as mid- to long-term funding through bank bonds increased.

By economic agents, households and non-profit organizations (8.3 trillion won), corporations (4.0 trillion won), and other financial institutions (0.7 trillion won) increased, while other sectors (-3.4 trillion won) decreased.

The average balance of narrow money (M1) in September was 1,224.7 trillion won, increasing by 0.6% compared to the previous month, mainly due to savings deposits with check-writing privileges.