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S. Korea's money supply continues to grow fast in Aug.

12:00 October 15, 2020

SEOUL, Oct. 15 (Yonhap) -- South Korea's money supply continued to grow at a fast clip in August as household and corporate lending grew amid a long streak of low rates and the new coronavirus pandemic, central bank data showed Thursday.

The country's M2 stood at 3,101.6 trillion won (US$2.71 trillion) as of end-August, up 9.5 percent from a year earlier, according to preliminary data from the Bank of Korea (BOK).

It decelerated from a 10 percent on-year gain in July when the money supply grew at the fastest pace in nearly 11 years. But M2 has grown at an on-year rate of more than 9 percent since April.

Compared with the previous month, M2 also rose 0.3 percent in August, slowing from a 0.5 percent on-month gain the previous month.

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

The pace of the growth slowed, but the M2 continued to rise as households and businesses took out loans to secure funds amid the COVID-19 pandemic, according to the central bank.

South Korea's liquidity aggregate, the broadest measure of money supply, reached 5,508.4 trillion won in August, unchanged from the previous month, it noted.

The BOK froze the policy rate at a record low of 0.5 percent for the third straight time on Wednesday amid heightened economic uncertainty from the coronavirus outbreak.

The central bank cut the base rate to the current level in May after delivering an emergency rate cut of half a percentage point to 0.75 percent in March.

This photo, taken on Sept. 18, 2020, shows a bank official explaining loan products to a customer at a branch in Seoul. (Yonhap)

sooyeon@yna.co.kr
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