S.Korea's money supply growth slows in August

SEOUL, Oct. 18 (Xinhua) -- South Korea's money supply growth slowed down in August due to higher interest rates, central bank data showed Tuesday.

The seasonally-adjusted M2, or broad money, amounted to 3,744.1 trillion won (2.62 trillion U.S. dollars) in August, up 7.2 percent from a year earlier, according to the Bank of Korea (BOK).

It was lower than an 8.0-percent increase in the previous month amid the policy rate hikes.

The BOK began to raise its benchmark interest rate in August last year, hiking the rate in eight steps from 0.50 percent to 3.00 percent.

The M1, or narrow money, advanced 2.5 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 of financial institutions, called Lf, gained 6.5 percent in the cited month. The year-over-year increase of liquidity aggregate, the broadest measure of money supply, was 6.8 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.