money supply-August

Money supply up in August on increased deposits bolstered by rate hikes

SEOUL, Oct. 18 (Yonhap) -- South Korea's money supply increased in August from a month earlier as deposits at banks expanded due to fast-rising interest rates, central bank data showed Tuesday.

The country's M2, a key gauge of money supply, stood at 3,744.1 trillion won (US$2.62 trillion) on average in August, up 0.7 percent from a month earlier, according to the preliminary data from the Bank of Korea (BOK).

On a year-on-year basis, the money supply grew 7.2 percent.

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

Banks' time deposits jumped 34.1 trillion won over the cited period, boosted by rising interest payments in line with the BOK's continued push for sharp rate hikes.

On-demand savings, however, shrank 10.1 trillion won over the same period as customers withdrew money from those with low interest payments in search of higher returns.

The BOK has hiked its benchmark interest rate by a combined 2.5 percentage points since August last year to keep a lid on inflation.

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