S. Korea's money supply growth hits record high in May

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SEOUL, July 15 (Xinhua) -- South Korea's money supply growth hit a record high in May amid the record-low policy rate, central bank data showed Wednesday.

The M2, called broad money, reached 3,053.9 trillion won (2.54 trillion U.S. dollars) in May, up 35.4 trillion won (29.5 billion U.S. dollars) from the previous month, according to the Bank of Korea (BOK).

It was the biggest monthly expansion since relevant data began to be compiled in 1986.

The ample liquidity was attributed to the record-low policy rate, which the BOK lowered by 25 basis points to 0.50 percent in May.

The M2 increased 9.9 percent in May from a year earlier, while the M1, dubbed narrow money, jumped 19.3 percent in the month.

The M1 refers to the currency in circulation, demand deposit, transferable savings deposit equivalent to cash. The M2 adds money market funds, time deposit and financial products that mature in less than two years to M1.

The liquidity of financial institutions, called Lf, gained 8.8 percent in the cited month. The year-over-year growth of liquidity aggregate, the broadest measure of money supply, was 8.6 percent.

The Lf includes financial products with a maturity of more than two years and liquidity at insurers and brokerages along with M2. The liquidity aggregate adds state and corporate bonds to the Lf. Enditem

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