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| Seen above are headquarters of Korea's four major financial holding firms including KB, Shinhan, Hana and Woori. Courtesy of each firm |
Korea's money supply shrank for the first time in nine months in December due in part to a decline in on-demand bank deposits, central bank data showed Tuesday.
The country's M2, a key gauge of the money supply, stood at 3,779 trillion won ($2.97 trillion) on average in December, down 0.2 percent from a month earlier, according to the preliminary data from the Bank of Korea (BOK).
This marked the first on-month decline since March 2022, when it fell 0.1 percent from a month earlier.
Compared with a year earlier, the amount also increased 4.5 percent, slowing from a 5.4 percent rise the month before.
The M2 is a measure of the money supply that counts cash, demand deposits and other easily convertible financial instruments.
The decline came as banks' demand deposits contracted 17.3 trillion won on-month, the second-largest shrinkage ever. Money trust also declined by 14.5 trillion won over the same period, the largest ever.
Money that flowed into time deposits, meanwhile, expanded by 31.6 trillion won on-month in December as people preferred safer assets amid rising interest rates and worries over an economic recession.
Last month, the central bank hiked the benchmark interest rate from 3.25 percent to 3.5 percent, the highest level since late 2008. It marked the seventh straight rate increase since April last year, the longest span of tightening. (Yonhap)
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