S. Korea's money supply growth slows in July

By Kim Soo-yeon
SEOUL, Sept. 9 (Yonhap) -- South Korea's money supply grew at a slower pace in
July than the previous month, the central bank said Wednesday, creating room for
an expected rate freeze.

The country's liquidity aggregate, the widest measure of the money supply,
reached 2,422.5 trillion won (US$1.98 trillion) as of the end of July, up 9.7
percent from a year earlier, according to the Bank of Korea (BOK).
July's growth slowed from an annual 9.9 percent increase in June, it added. The
liquidity aggregate covers currency in circulation, all types of deposits at
financial institutions and state and corporate bonds.
Meanwhile, the country's M2, a narrower measure of its money supply, expanded 9.7
percent in July, compared with 9.6 percent a month earlier.
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 M2 is estimated to have grown in the
mid-9 percent range in August as increased bank lending offset the effects of the
country's shrinking current account surplus.
The data comes a day before the BOK makes its monthly interest-rate decision.
Korea's central bank is widely forecast to freeze the benchmark seven-day repo
rate at a record low of 2 percent for the seventh consecutive month. It lowered
the rate by a total of 3.25 percentage points between October and February in a
bid to put the brakes on a sharp economic freefall.
sooyeon@yna.co.kr
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