SEOUL, Nov. 8 (Xinhua) -- Money supply growth in South Korea hit a four-year low in September on expectations for an interest rate hike in the near future, central bank data showed Wednesday.
The M2, called broad money, grew 4.6 percent in September from a year earlier, marking the lowest increase since August 2013, according to the Bank of Korea (BOK).
The slowing expansion came amid rising expectations for the BOK's rate hike late this year or early next year. The BOK put on hold its benchmark rate at an all-time low of 1.25 percent last month, but one of the seven-member policy board claimed a 25-basis-piont rate increase.
The M1, dubbed narrow money, advanced 7.9 percent in September from a year ago.
The M1 refers to currency in circulation, demand deposits and transferable savings deposits equivalent to cash. The M2 adds money market funds, time deposit and financial products that mature in less than two years to M1.
Liquidity of financial institutions, called Lf, gained 5.9 percent in the cited period. The year-on-year expansion of liquidity aggregate, the broadest measure of money supply, was 6.7 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.
