Money Supply Rises by Over 17 Trillion Won in a Month, Up for 11th Straight Month

September M2 average balance on a seasonally adjusted basis: 4,283.9 trillion won
Driven by inflows of export proceeds from large corporations and higher deposit rates

The money supply increased by more than 17 trillion won in September, extending its upward trend to 11 consecutive months. The rise was driven by an increase in corporate foreign-currency deposits amid a semiconductor boom and growth in time deposits and installment savings deposits as interest rates rose.

According to “Money and Liquidity in September 2026,” released by the Bank of Korea on November 13, the average balance of broad money (M2), on a seasonally adjusted basis, stood at 4,283.9 trillion won in September, up 17.1 trillion won (0.4%) from the previous month.

M2 has risen for 11 consecutive months since November 2025. However, the increase narrowed from 39.1 trillion won (0.9%) in August.

M2 is a broad measure of the money supply that includes money market funds (MMFs), time deposits and installment savings deposits with maturities of less than two years, certificates of deposit (CDs), and repurchase agreements (RPs), in addition to narrow money (M1), which comprises cash, demand deposits, and savings deposits that allow deposits and withdrawals at any time.

By financial product, other monetary instruments, mainly foreign-currency deposits with maturities of less than two years, increased by 11.1 trillion won in a month, driven by inflows of export proceeds from large corporations. Time deposits and installment savings deposits with maturities of less than two years also rose by 8.2 trillion won over the same period as interest rates increased.

By economic sector, holdings rose by 12.6 trillion won among households and nonprofit organizations and by 5.2 trillion won among other financial institutions. Holdings among households and nonprofit organizations recorded their largest increase in one year and 10 months, since November 2024 (+15.8 trillion won), as deposits across the board grew.

By contrast, holdings among nonfinancial corporations fell by 3.3 trillion won, mainly in money trusts with maturities of less than two years and MMFs. This was the first decline in 11 months, since October 2025.

Narrow money (M1), which includes only cash, demand deposits, and savings deposits that allow deposits and withdrawals at any time, stood at 1,355.2 trillion won, down 0.2% from the previous month. It has declined for three consecutive months since July.

Liquidity of financial institutions (Lf, average balance) rose 0.4% from the previous month to 6,410 trillion won, while broad liquidity (L, end-of-period balance) increased 0.4% from the end of the previous month to 8,129.1 trillion won.

Lf includes M2, as well as long-term financial products with maturities of two years or more and financial products issued by institutions that do not take deposits. L includes Lf, along with other financial institution products, government bonds, municipal bonds, corporate bonds, and commercial paper.

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