SEOUL, Sept. 15 (Xinhua) -- South Korea's money supply rose for a ninth straight month due to a strong shift toward time deposits, caused by aggressive monetary tightening, central bank data showed Tuesday.
The seasonally-adjusted M2, called broad money, grew 0.3 percent from a month earlier to 4,225.6 trillion won (3.13 trillion U.S. dollars) in July, keeping an upward trend since November 2025, according to the Bank of Korea (BOK).
Following a 25-basis-point increase in July, the BOK raised its benchmark interest rate by another quarter percentage point to 3.00 percent in August, prompting depositors to lock their funds into short-term fixed-income products.
Time deposits with a maturity of less than two years soared by 27.3 trillion won in July after gaining 7.1 trillion won in the previous month.
Capital inflows into money trusts under 2 years nearly doubled from 6.3 trillion won in June to 11.4 trillion won in July.
Affected by the monetary tightening, the M1, called narrow money, reduced 2.2 percent in July on a monthly basis.
The M1 refers to currency in circulation, demand deposits and transferable savings deposits equivalent to cash. The M2 adds money market funds, time deposits and financial products that mature in less than two years.
The liquidity of financial institutions, called Lf, declined 0.4 percent in the cited month, while the liquidity aggregate, the broadest measure of money supply, dwindled 0.5 percent.
The Lf includes financial products with a maturity of over two years and liquidity at insurers and brokerages along with M2. The liquidity aggregate adds state and corporate bonds to the Lf. ■
