S. Korea's money supply keeps growing in September on record-low policy rate

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SEOUL, Nov. 13 (Xinhua) -- South Korea's money supply kept growing in September amid a record-low policy rate, central bank data showed Friday.

The M2, or broad money, amounted to 3,115.8 trillion won (2.8 trillion U.S. dollars) in September, up 9.2 percent from a year earlier, according to the Bank of Korea (BOK).

The money supply continued to increase as the BOK cut its target rate by 25 basis points to an all-time low of 0.50 percent in May after slashing it by 50 basis points in March.

The M1, or narrow money, jumped 25.1 percent in September from a year earlier.

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

The liquidity on financial institutions, called Lf, gained 7.9 percent in the cited month. The year-over-year expansion of liquidity aggregate, the broadest measure of money supply, was 8.3 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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