Lead

South Korea's money supply continued its upward trend in April, while foreign currency deposits rose for a second consecutive month in May, according to data from the Bank of Korea (BOK) reported by Yonhap News.

The country's M2, a key gauge of the money supply, stood at an average of 4,153.9 trillion won (US$2.74 trillion) in April, up 0.6 percent, or 25.3 trillion won, from a month earlier, the central bank's preliminary data showed. The figure has been on a steady rise since November.

Separately, outstanding foreign currency-denominated deposits held by residents reached US$112.25 billion at the end of May, up $1.57 billion from a month earlier, according to BOK data. The increase followed a $8.51 billion rise in April, which had snapped a three-month decline.

Coverage Comparison

Both reports, published by Yonhap News, draw on official Bank of Korea data and attribute the movements to specific financial behaviors. The April money supply report highlights the role of short-term deposits and funds awaiting investment, while the May foreign currency deposit report points to derivatives trading requirements and exporting companies' dollar receipts as key drivers.

The two reports cover different time periods and metrics, but together they paint a picture of rising liquidity in the South Korean financial system, with households and nonfinancial corporations contributing to the increase in domestic money supply, and corporate entities driving the growth in foreign currency deposits.

Key Claims

  • South Korea's M2 money supply averaged 4,153.9 trillion won in April, up 0.6 percent from the previous month, according to preliminary BOK data reported by Yonhap.
  • The increase was attributed to gains in short-term deposits and money market funds, which mostly invest in short-term products, amid a rally in the local stock market.
  • By sector, liquidity declined by 0.6 trillion won among financial institutions, while nonfinancial corporations and households saw their liquidity rise by 7 trillion won.
  • Foreign currency deposits held by residents stood at $112.25 billion at the end of May, up $1.57 billion from a month earlier, according to BOK data reported by Yonhap.
  • The BOK attributed the increase in dollar deposits to higher basic deposits required for derivatives trading amid stock market volatility, as well as increased dollar receipts by exporting companies.
  • By currency, U.S. dollar-denominated deposits increased by $2.24 billion to $95.56 billion, while euro-denominated deposits dropped by $280 million to $6.3 billion and Japanese yen deposits fell by $690 million to $7.52 billion.
  • Corporate foreign currency deposits rose by $2.54 billion to $97.42 billion, while individual holdings declined by $960 million to $14.83 billion.

Perspectives

No distinct viewpoints from named parties beyond the Bank of Korea's official data and attributions were present in the material. The reports present the central bank's data and explanations without alternative perspectives.