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South Korea's Money Supply Rises for 6th Month Amid Stock Market Boom

South Korea's money supply has been steadily climbing for six months straight. The latest figures show a 0.7% monthly increase in September, bringing the total to 4,430.5 trillion won. This growth was primarily driven by significant inflows into investment-related funds as the domestic stock market performed strongly. The central bank attributes this trend to both quarterly financial management and funds waiting for investment opportunities.

Key Points: South Korea Money Supply Grows 6 Months Amid Stock Rally

  • Money supply grew 0.7% monthly to 4,430.5 trillion won in September
  • Year-on-year increase reached 8.5% showing strong annual growth
  • Investment trust funds surged 5.7 trillion won amid stock market strength
  • Demand deposits doubled to 9.5 trillion won from previous month's increase
2 min read

Money supply rises for 6th straight month amid strong stock market: BOK

South Korea's M2 money supply increases for sixth straight month, rising 0.7% in September as investment funds flow into strong stock market.

"The increase reflected the balance sheet management at the quarter's end and inflow of funds waiting for investment opportunities - BOK Official"

Seoul, Nov 12

South Korea's money supply increased for the sixth consecutive month in September, driven by an inflow of investment-related funds amid a strong domestic stock market, central bank data showed on Wednesday.

The country's M2, a key measure of the money supply, stood at 4,430.5 trillion won (US$3.02 trillion) in September, up 0.7 percent from the previous month, according to preliminary data from the Bank of Korea (BOK), reports Yonhap news agency.

The figure has been on a constant increase since April. Compared with a year earlier, the figure jumped 8.5 percent in September.

The M2 is a measure of the money supply that counts cash, demand deposits and other easily convertible financial instruments.

In detail, investment trust funds increased 5.7 trillion won in September from the previous month, while demand deposits rose 9.5 trillion won, more than doubling from the 3.7 trillion-won increase recorded in August.

Installment and savings deposits with free withdrawals also went up by 6.8 trillion won.

"The increase reflected the balance sheet management at the end of the quarter and the inflow of funds waiting for investment opportunities," a BOK official said.

An official inspects 50,000 won banknotes at Hana Bank's counterfeit response center in Seoul, in this file photo taken July 17, 2024. (Yonhap)

Meanwhile, the Ministry of Trade, Industry and Resources held its first policy consultation meeting under the administration of President Lee Jae Myung on Wednesday, discussing South Korea's key economic agenda items, such as the artificial intelligence (AI) transformation of the manufacturing sector and strengthening trade competitiveness, with government officials and experts.

The meeting also covered discussions on Korea's recent tariff agreement with the United States and a strategy on advancing the country's semiconductor industry, according to the ministry.

The meeting was attended by 26 experts on AI, economic security, finance, trade and resources, along with many government officials.

"As uncertainties surrounding our economy have eased to some extent with the trade deal with the U.S., we now have to concentrate all our efforts on strengthening the fundamental competitiveness of our industries," Industry Minister Kim Jung-kwan was quoted as saying in the meeting.

- IANS

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Reader Comments

R
Rohit P
8.5% year-on-year growth in money supply is quite significant. Shows how strong their stock market performance is driving economic activity. Hope our RBI is monitoring such trends for India's benefit.
A
Arjun K
The demand deposits doubling from August to September indicates strong investor confidence. South Korea's strategic focus on semiconductors and AI is clearly working wonders for their economy.
S
Sarah B
While the numbers look impressive, I wonder about the inflation implications. Rapid money supply growth often leads to price pressures. Hope they have adequate monetary controls in place.
V
Vikram M
The 6.8 trillion won increase in savings deposits shows people are still cautious despite market optimism. Smart balance between investment and safety nets. 🇮🇳
M
Michael C
South Korea's approach to bringing together government officials and industry experts for policy consultation is commendable. This collaborative model could benefit many developing economies including India.

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