Market sags after two European elections

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Market sags after two European elections

Korea’s money supply remained nearly unchanged in March from the previous month as gains in short terms trusts and savings were offset by contractions in funds and certificates, the central bank said yesterday.

The country’s M2, a narrow measure of the money supply, reached a seasonally adjusted 1,768.5 trillion won ($1.54 trillion) in March, effectively unchanged from the 1,756.3 trillion won of the previous month, according to the Bank of Korea (BOK). Compared with a year earlier, the M2 expanded 5.7 percent in the month.

Since January, the central bank began releasing seasonally adjusted figures on money supply data using month-on-month comparisons, in order to better gauge the short-term economic situation.

M2 covers currency in circulation and all types of deposits with a maturity of less than two years at lenders and non-banking financial institutions, excluding those held by insurers and brokerage houses.

“There was a rise in short-term money in trusts as well as short-term time and savings deposits, but there was a decrease in money market funds and beneficiary certificates that nullified any gains,” the BOK said in a statement.

Liquidity provided by financial institutions rose 1.3 percent in March from a month earlier to 2,341.1 trillion won, and gained 8.8 percent on-year.

Growth of Korea’s liquidity aggregate, the broadest measure of the money supply, rose 1.8 percent on-month in the third month of this year to 3,061.1 trillion won, the central bank said. The liquidity aggregate covers currency in circulation and all types of deposits at financial institutions and state and corporate bonds.

The data was released a day ahead of the BOK monetary policy meeting. The central bank is widely expected to leave the key interest rate unchanged at 3.25 percent for the 11th straight month

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