S.Korea's Money Supply Growth Hits 46-month High In December

:South Korea's money supply growth hit the highest in 46 months in December amid the record-low policy rate, central bank data showed on Friday

SEOUL, (APP - UrduPoint / Pakistan Point News - 14th Feb, 2020 ):South Korea's money supply growth hit the highest in 46 months in December amid the record-low policy rate, central bank data showed on Friday.

The M2, called broad money, gained 7.9 percent in December from a year earlier, marking the fastest increase since February 2016, according to the Bank of Korea (BOK).

It came as the BOK cut its benchmark interest rate to a record low of 1.25 percent in October last year. The target rate was lowered from 1.75 percent to 1.50 percent last July.

The M1, dubbed narrow money, was up 9.6 percent in December, after rising 7.0 percent in the previous month.

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

The liquidity of financial institutions called Lf expanded 8.2 percent in the cited period. The year-over-year increase of liquidity aggregate, the broadest measure of money supply, was 7.5 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.