S. Korea's money supply growth hits over 3-year low in Dec.

SEOUL, Feb. 10 (Yonhap) -- South Korea's money supply grew at the slowest pace in more than three years in December mainly due to cutbacks in foreign investors' securities investments and easing bank loan growth, the central bank said Wednesday.

The country's M2, a narrower measure of its money supply, reached 1,570 trillion
won (US$1.36 trillion) in December, up 9.3 percent from the previous year,
according to the Bank of Korea (BOK). December's growth marked the slowest
increase since September 2006 when the M2 grew 8.9 percent.
The M2 covers currency in circulation and all types of deposits with maturity
less than two years at lenders and non-banking financial institutions, excluding
those at insurers and brokerage houses.
The BOK said in a separate statement that the country's M2 growth is estimated at
around the upper 8 percent range in January mainly because foreign investors'
stock investments outweighed the slowing growth of bank loans.
Meanwhile, the country's liquidity aggregate, the widest measure of the money
supply, expanded 11.4 percent in December from a year earlier, compared with a
10.4 percent on-year advance in November, the BOK said.
The data comes a day before the BOK makes its monthly interest-rate decision. The
BOK is widely forecast to freeze the benchmark seven-day repo rate at a record
low of 2 percent for the 12th consecutive month. It slashed the rate by a
combined 3.25 percentage points between October 2008 and February 2009 in a bid
to put the brakes on a sharp economic free-fall.
sooyeon@yna.co.kr
(END)