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S. Korea's Money Supply Hits 5-Month Growth Streak
(MENAFN) South Korea's broad money supply expanded for a fifth consecutive month in March, central bank data revealed Wednesday, even as market confidence in further interest rate reductions continued to erode.
Seasonally adjusted M2 — the country's broadest measure of money supply — climbed 0.4% month-on-month to 4,132.1 trillion won (approximately $2.77 trillion USD), according to figures released by the Bank of Korea (BOK). The reading extends an unbroken upward trend stretching back to November 2025.
Expectations for additional monetary easing have cooled considerably, pressured by a surge in semiconductor exports and mounting inflationary concerns tied to ongoing tensions across the Middle East — two factors that have shifted the economic calculus for policymakers in Seoul.
The BOK held its benchmark interest rate steady at 2.50% at its most recent meeting, pausing after back-to-back cuts of 25 basis points delivered in February and May of 2025.
Narrow money, tracked under the M1 measure, posted a sharper monthly gain of 0.7% in March — a marked acceleration from the 0.1% rise recorded in the prior month. M1 encompasses currency in active circulation, demand deposits, and transferable savings deposits that function as near-cash instruments.
The broader M2 measure extends that scope to include money market funds, time deposits, and financial instruments with maturities of under two years — offering a fuller picture of overall liquidity conditions within the economy.
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