Continued Expansion in South Korea's Money Supply

South Korea's money supply has shown a steady increase for the 17th straight month in October, reflecting a significant rise in liquidity within the economy. This trend is largely driven by banks' efforts to attract deposits and the reinflow of corporate funds.

According to the "Monetary and Liquidity Trends in October" report by the Bank of Korea, the broad money supply (M2) reached 4,110.4 trillion won, marking a 1% increase from the previous month. This includes the narrow money supply (M1), money market funds (MMFs), time deposits, savings deposits, investment trust funds, and certificates of deposit (CDs).

The report highlights that investment trust funds, MMFs, and time deposits contributed significantly to the increase, while other liquid assets showed a slight decline. By economic entity, other financial institutions, corporations, and non-profit organizations all experienced growth in their respective deposits.

The Bank of Korea attributed the growth in time and savings deposits to commercial banks' proactive efforts to attract deposits, and the increase in MMFs and money trusts to the reinflow of corporate funds for financial ratio management.