Min-ho Shin, Gounee Yang

Global Economic News

AS individual investors have sold risky assets such as stocks due to the base interest rate hike, South Korea’s money supply surpassed 39 trillion won (US$33 billion), hitting a record. The increase was the highest level in 12 years and 11 months.

According to the Bank of Korea’s report “Currency and Liquidity in November 2021,” the money supply in the market (based on M2) increased 39.4 trillion won (1.1 percent) month on month to 3589.1 trillion won in November 2021. Compared to a year ago, it increased 12.9 percent from the previous month (12.4 percent). This is the highest level in 12 years and 11 months since December 2008 (13.1 percent). M2 is a measure of the money supply that includes money market funds (MMF), regular deposits and installment savings of less than 2 years, and beneficiary certificate in addition to M1 (cash, checking deposits, and easily convertible money).

The money supply in the market first surpassed 3,000 trillion won in April last year, and has continued to hit the highest every month.

In November last year, the money supply increased in both households and businesses. By economic entity, the money supply in households and non-profit organizations increased 1 percent from the previous month.