South Korea's money supply growth slowed in December, giving central bank more room to reduce borrowing costs to boost the economy, central bank data showed Wednesday.

The country's M2, called broad money, rose 0.1 percent to a seasonally-adjusted 1,831.8 trillion won (1.69 trillion U.S. dollars) in December compared with the prior month, according to the Bank of Korea (BOK). The reading was down from a 0.4 percent increase in November.

The slower growth granted more room for the BOK to cut the benchmark seven-day repurchase rate further. The central bank froze the rate at 2.75 percent in January after lowering the borrowing costs in July and October last year.

The BOK is scheduled to hold the February rate-setting meeting on Thursday. Market watchers expected the bank to freeze the rate once more this month to see if the upcoming government under President-elect Park Geun-hye would unveil new stimulus measures.

BOK Governor Kim Choong-soo said Jan. 14 that monetary policy will be effective when it comes with fiscal policy, indicating that additional monetary easing would be made after the fiscal stimulus measures are announced.

From a year before, the seasonally-unadjusted M2 expanded 4.5 percent in December after increasing 4.4 percent in the prior month.

The M1, dubbed as narrow money, rose 0.8 percent in December to a seasonally-adjusted 454.4 trillion won. From a year earlier, the seasonally-unadjusted figure advanced 5.8 percent.

The M1 covers currency in circulation and demand deposit equivalent to cash, while the M2 adds transferable savings deposit, time deposit and financial products that mature in less than two years to M1.

Liquidity of financial institutions, also called Lf, rose 0.3 percent in December from the prior month. From the same month of last year, the Lf increased 7.3 percent.

The on-month growth of liquidity aggregate, the broadest measure of money supply, logged 0.2 percent in December, down from 0.6 percent in November. The on-year figure was 8 percent in December from 7.9 percent in November.

The Lf covers financial products with a maturity of more than two years and liquidity at insurers and brokerages along with M2, while the liquidity aggregate adds state and corporate bonds to the Lf.

The BOK began releasing the seasonally-adjusted figures on a monthly basis starting January last year to better reflect short- term changes in monetary conditions. The seasonally-unadjusted data is being offered on a yearly basis to reflect the long-term monetary trend.