S. Korea's money supply grows for 11th month in September

SEOUL, Nov. 13 (Xinhua) -- South Korea's money supply grew for the 11th straight month, driven by inflows of export proceeds from large companies and higher interest rates leading to an increase in time and savings deposits, central bank data showed Friday.

The seasonally adjusted M2, called broad money, rose 0.4 percent from a month earlier to 4,283.9 trillion won (3.21 trillion U.S. dollars) in September, keeping an upward trajectory since November last year, according to the Bank of Korea (BOK).

The BOK delivered back-to-back rate hikes in July and August, raising its benchmark interest rate to 3.00 percent.

Affected by the monetary tightening, the M1, called narrow money, shrank 0.2 percent in September on a monthly basis, maintaining a downward momentum for three consecutive months.

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.

The liquidity of financial institutions, called Lf, increased 0.4 percent in the cited month, while the liquidity aggregate, the broadest measure of money supply, gained 0.4 percent.

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