S.Korea's money supply logs 2nd-highest growth in August

SEOUL, Oct. 13 (Xinhua) -- South Korea's money supply logged the second-highest monthly growth in August amid the near-record-low policy rate, central bank data showed Wednesday.

The M2, or broad money, amounted to 3,494.4 trillion won (2.93 trillion U.S. dollars) in August, up 50.5 trillion won (42.3 billion U.S. dollars) from the previous month, according to the Bank of Korea (BOK).

It marked the second-highest monthly increase since data began to be compiled in 2002. The record-high expansion of 50.6 trillion won (42.4 billion U.S. dollars) was tallied in April.

The BOK raised its benchmark interest rate from an all-time low of 0.50 percent to 0.75 percent in late August, but the near-record-low policy rate boosted money demand.

From a year earlier, the M2 increased 12.5 percent in August.

The M1, or narrow money, surged 20.0 percent in August on a yearly basis.

The M1 refers to currency in circulation, demand deposit and transferable savings deposit equivalent to cash. The M2 adds money market fund, time deposit and financial products that mature in less than two years.

The liquidity on financial institutions, called Lf, gained 10.4 percent in the cited month. The year-over-year increase of liquidity aggregate, the broadest measure of money supply, was 10.3 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.