South Korea's M2 money supply climbs 0.3% in July, led by short-term deposits

The Bank of Korea's latest preliminary figures reveal that South Korea's broad money supply (M2) expanded by 0.3% in July, reaching an average of 4,225.6 trillion won (approximately US$3.51 trillion). This increase was primarily fueled by higher short-term deposits and money trusts with maturities of less than two years. Sector-specific data indicate that non-financial corporations added 20.6 trillion won in liquidity, whereas households and nonprofit organizations experienced an 11.6-trillion-won drop, and financial institutions' liquidity fell by 5.7 trillion won.

M2, which encompasses cash, demand deposits and other easily convertible assets, has been on a steady upward trajectory since November. The continued rise points to ongoing credit expansion in the Korean economy, a factor that could influence inflation and future monetary-policy decisions.