S. Korea sees 3-year low money supply growth in May
- Source: Xinhua
- [10:34 July 09 2009]
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South Korea's money supply growth marked the slowest in almost three years in May as local banks stepped back from expanding loans, the central bank said Wednesday.
According to the Bank of Korea (BOK), the country's M2, a measure of money supply that covers currency in circulation and all types of deposits with maturity less than two years, climbed to 1,491.5 trillion won (1.17 trillion US dollars) in May, marking a 9.9 percent on-year growth.
The growth in May compared with an annual 10.6 percent gain in April, standing at the lowest rise since September 2006 when the figure hit 8.9 percent.
Although the South Korean economy is marking a current account surplus, the M2 expansion slowed down due to financial firms' reluctance over lending to private companies, a BOK official said.
Meanwhile, the country's narrowest gauge of the money supply, or M1, posted a growth of an annual 17 percent in May, down 17.4 percent from the previous month, while the nation's liquidity aggregate, the widest measure of the money supply, grew 9.5 percent on year to 2,396.1 trillion won (1.88 billion US dollars) .
The recent data comes a day before the BOK announces its monthly interest-rate decision.
The BOK has left the benchmark seven-day repo rate at a record low of 2 percent for the fifth straight month, after conducting six consecutive rate cuts totaling 3.25 percentage points between October and February.