Money Supply in January Up by 27.7 Trillion Won... Rises for Second Consecutive Month

Bank of Korea, January 2026 Money Supply and Liquidity Trends
Based on New M2 Excluding Beneficiary Certificates... Former M2 Up 1.2%

In January, the amount of money in circulation increased by nearly 28 trillion won, marking a rise in the money supply for the second consecutive month.

A staff member is holding a 50,000 won bill at the Hana Bank Anti-Counterfeiting Center in Jung-gu, Seoul. Photo by Yonhap News

According to the Bank of Korea on March 13, the average balance of broad money (M2) in January, based on seasonally adjusted data, was 4,108.9 trillion won, up 27.7 trillion won (0.7%) from the previous month. On a non-seasonally adjusted basis, this was a 4.6% increase compared to the same month last year. M2 is a broad monetary indicator that includes narrow money (M1)—such as cash, demand deposits, and passbook savings accounts with no fixed term—along with money market funds (MMF), time deposits and savings deposits with maturities of less than two years, negotiable certificates of deposit (CDs), and repurchase agreements (RPs).

The average balance of the old M2, which includes beneficiary certificates, increased by 1.2% from the previous month and by 8.4% from the same month last year. Beneficiary certificates surged by 43.1% year-on-year, contributing 3.9 percentage points to the 8.4% growth rate of the old M2. Excluding beneficiary certificates, the old M2 increased by approximately 4.5% compared to the same month last year.

By product type, other liquid assets grew by 21 trillion won due to an increase in comprehensive asset management accounts (CMA), which reflected rising foreign currency deposits and the inflow of funds waiting to be invested in stocks. Passbook savings accounts with no fixed term rose by 15.5 trillion won, as households' funds waiting for investment also increased.

By sector, non-financial corporations and other financial institutions saw their balances expand by 18.9 trillion won and 15.2 trillion won, respectively, widening the scale of the increase. However, the increase for households and nonprofit organizations was limited to 1.9 trillion won, narrowing the growth. The "other" sector decreased by 9.9 trillion won, with the scale of the decline expanding.

The average balance of M1, on a seasonally adjusted basis, was 1,356.4 trillion won, up 1.3% from the previous month. Financial institution liquidity (Lf, average balance) stood at 6,097.8 trillion won, a 0.8% increase from the previous month, while broad liquidity (L, end-of-month balance) reached 7,759.2 trillion won, up 0.3% from the end of the previous month. Lf includes not only M2, but also long-term financial products with maturities of two years or more and financial products issued by non-deposit-taking institutions. L encompasses Lf, as well as other financial institution products, government bonds, local government bonds, corporate bonds, and commercial paper.

This content was produced with the assistance of AI translation services.