Korea's money supply growth slows to 10-month low in Oct.

SEOUL, Dec. 10 (Yonhap) -- The growth of South Korea's money supply slowed to a
10-month low in October as local banks cut down on lending and foreign investors
dumped stocks on the Seoul bourse, the central bank said Wednesday.

The country's liquidity aggregate reached 2,249 trillion won (US$1.56 trillion)
as of the end of October, up 11.5 percent from a year earlier, according to the
Bank of Korea (BOK). October's money supply growth decelerated from a 12.1
percent on-year advance in September.
The liquidity aggregate, the broadest measure of the nation's money supply,
covers currency in circulation, all types of deposits at financial institutions,
and state and corporate bonds.
"Liquidity provided by financial institutions has been on the rise, but the
growth of such liquidity sharply eased compared with the past few months amid a
credit crunch," said Kim Hwa-yong, a BOK official. "A selling spree of local
stocks by foreigners also led the money supply to grow slowly."
Meanwhile, the BOK said a narrower measure of the money supply called the M2 also
grew at a slower pace in October from a month earlier.
The M2 covers currency in circulation and all types of deposits with maturity
less than two years at lenders and non-banking financial institutions, though not
with insurers and brokerage houses.
In a separate report, the BOK said the gain in the M2 is estimated to have slowed
in November to 14 percent or less as banks' lending growth eased and foreigners
continued to sell local stocks.
The data came a day before the BOK holds its monthly rate-setting meeting.
Economists say the BOK is widely expected to cut its key interest rate by 0.5
percentage point to 3.5 percent to bolster the country's cooling economic growth.
Since early October, the BOK has trimmed the rate by a combined 1.25 percentage
point to 4 percent.
sooyeon@yna.co.kr