Money Supply in Market Rises by 29 Trillion Won... Seventh Consecutive Month of Increase

Bank of Korea Reports on Monetary and Liquidity Aggregates for June 2026
MMFs and Time Deposits Under Two Years Rise by 7.3 Trillion Won and 7.1 Trillion Won, Respectively

In June, the amount of money circulating in the market increased by more than 29 trillion won, marking a seventh consecutive month of growth.

According to the “Monetary and Liquidity Statistics for June 2026” released by the Bank of Korea on the 14th, the average seasonally adjusted balance of the broad money supply (M2) in June stood at 4,213 trillion won, which represents an increase of 29.4 trillion won (0.7%) from the previous month. On a non-seasonally adjusted basis, this was a 6% increase compared to the same month last year.

M2 is a broad measure of money supply that includes currency, demand deposits, and other immediately accessible savings deposits (narrow money, M1), as well as money market funds (MMFs), time deposits and installment savings with maturities of less than two years, negotiable certificates of deposit (CDs), and repurchase agreements (RPs).

The old M2 average balance, which includes beneficiary certificates, rose by 1.2% from the previous month and by 12.3% compared to the same month last year. The sharp 64.5% year-on-year increase in beneficiary certificates was the key factor, boosting the old M2 by 6.5 percentage points.

By product, money market funds (MMFs) increased by 7.3 trillion won, while time deposits and installment savings with maturities of less than two years increased by 7.1 trillion won. A Bank of Korea official explained, “The growth in MMFs was mainly driven by non-financial corporations putting more short-term surplus funds to work, and the increase in short-term time and installment savings was due to a rise in corporate holdings.”

By economic entity, non-financial corporations saw an increase of 45.7 trillion won, and other financial institutions saw a rise of 5.4 trillion won. However, households and nonprofit organizations decreased by 19.8 trillion won, and social security funds and local governments fell by 1.1 trillion won.

The seasonally adjusted average balance of the narrow money supply (M1) was 1,402.9 trillion won, up 0.4% from the previous month. On a non-seasonally adjusted basis, M1 rose by 10% year-on-year.

The average balance of financial institution liquidity (Lf) stood at 6,368.7 trillion won, an increase of 1% compared to the previous month, while broad liquidity (L), based on the end-of-month balance, stood at 8,115.3 trillion won, up 0.8% from the end of the previous month.

The Lf category includes not only M2 but also long-term financial products with maturities of two years or more, as well as financial products issued by non-deposit-taking institutions. The L category encompasses both Lf and additional financial institution products, government bonds, local government bonds, corporate bonds, and commercial paper.

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