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Money supply falls for first time in 23 months in March: BOK

Published: 15 May. 2025, 14:36

The Bank of Korea Money Museum [BAEK JONG-HYUN]

Korea's money supply fell for the first time in 23 months in March, due mainly to a decline in savings deposits and other liquid financial products, central bank data showed Thursday.

The country's M2, a gauge of the money supply that counts cash, demand deposits and other easily convertible financial instruments, stood at 4,227.8 trillion won ($3.01 trillion) in March, down 0.1 percent from a month earlier, according to the preliminary data from the Bank of Korea (BOK).

It marked the first monthly decline since April 2023.

On a year-over-year basis, however, the money supply advanced 6.1 percent in March.

Savings deposits fell 7.2 trillion won from the previous month, and other liquid financial products dropped 5.7 trillion won. Financial bonds with maturities under two years also lost 4.8 trillion won.

But investment funds went up by 8.6 trillion won on month, and demand deposits increased 5.5 trillion won.

“Savings deposits declined due to fiscal spending by local governments, while other liquid financial products, particularly foreign currency deposits, went down as a result of overseas investments and import payment settlements,” a BOK official said.

Korea's liquidity aggregate, the broadest measure of money supply, edged up 0.3 percent from a month earlier to stand at 7,236 trillion won in March, the data showed.

Yonhap