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S. Korea's money supply keeps rising in November on low policy rate
Last Updated: 2019-01-10 17:09 | Xinhua
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Money supply in South Korea kept rising in November last year amid the protracted trend of low policy rate, central bank data showed Thursday.

The M2, called broad money, grew 6.8 percent in November from a year earlier, after rising 6.8 percent in October, according to the Bank of Korea (BOK). It was the fastest increase in 21 months.

The continued expansion came as demand remained strong for corporate loans amid the low policy rate.

The BOK hiked its benchmark interest rate by a quarter percentage point in November to 1.75 percent, posting the first rate increase in 12 months. It was far lower than the U.S. target rate ranging from 2.25 percent to 2.50 percent.

The M1, dubbed narrow money, added 2.7 percent in November from a year earlier.

The M1 refers to the 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, expanded 7.5 percent in the cited period. The year-over-year increase of liquidity aggregate, the broadest measure of money supply, was 6.5 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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