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| An official of Bank of Korea (BOK) speaks during a meeting at the central bank in Seoul, March 9. Yonhap |
Korea's money supply decreased for the first time in nearly 10 years in January, largely due to aggressive monetary tightening by the Bank of Korea (BOK), central bank data showed Wednesday.
The country's M2, a key gauge of the money supply, stood at 381 trillion won ($2.93 trillion) in January, down 6.7 trillion won, or 0.2 percent, from a month earlier, according to the preliminary data from the Bank of Korea (BOK).
The monthly M2 dropped for the first time since August 2013, when the figure contracted 0.1 percent.
The M2 is a measure of the money supply that counts cash, demand deposits and other easily convertible financial instruments.
The BOK recently revised the December money supply with a 0.1 percent gain, from a 0.2 percent contraction.
Last month, the BOK left its policy interest rate unchanged at 3.5 percent, the first freeze after seven straight months of increases amid growing concerns over an economic slowdown. The central bank also lowered its growth outlook for this year to 1.6 percent from a 1.7 percent rise predicted three months earlier.
The BOK attributed the money supply fall in January to a sharp decrease in on-demand bank deposits.
Amid the central bank's aggressive rate hikes, Korea's on-demand bank deposits by firms and individuals decreased by 25.8 trillion won in January from a month ago.
Time deposits, in contrast, soared by 18.9 percent during the cited period. (Yonhap)
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