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S.Korea's money supply keeps rising on low policy rate
Last Updated: 2018-08-09 17:50 | Xinhua
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South Korea's money supply kept rising in June on the near-record-low policy rate, central bank data showed Thursday.

The M2, called broad money, gained 6.1 percent in June from a year earlier, according to the Bank of Korea (BOK).

The growth rate hovered around 6 percent for five months to June as the BOK refrained from altering its benchmark rate since November when it lifted the rate to the current 1.50 percent from an all-time low of 1.25 percent.

Demand for household loan weakened as banks tightened loan standard, but corporate loans increased on the still low borrowing costs, leading to the continued growth in money supply.

The M1, dubbed narrow money, advanced 5.9 percent in June from a year earlier.

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 to M1.

Liquidity of financial institutions, called Lf, increased 6.7 percent in the cited period. The year-over-year expansion of liquidity aggregate, the broadest measure of money supply, was 6.6 percent.

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

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