Other monetary products up 11 trillion won

Inside a Samsung Electronics semiconductor facility [Samsung Electronics]
Inside a Samsung Electronics semiconductor facility [Samsung Electronics]

South Korea's money supply expanded by 17.1 trillion won ($12.8 billion) in September, driven by an influx of semiconductor export payments — marking 11 consecutive months of growth.

According to monetary and liquidity data the Bank of Korea released Friday, the average broad money supply (M2) in September stood at 4,283.9 trillion won, up 17.1 trillion won, or 0.4 percent, from the previous month.

The increase extended a streak of growth that began in November last year. However, the pace of expansion narrowed from the 39.1 trillion won, or 0.9 percent, gain recorded the month before.

M2, the broad measure of money supply, encompasses not only cash, demand deposits and savings accounts (M1) but also short-term financial instruments that can be quickly converted to cash — including money market funds (MMFs), time deposits and installment savings with maturities under two years, certificates of deposit (CDs), repurchase agreements (RPs), financial bonds with maturities under two years, and monetary trusts with maturities under two years.

Within M2, other monetary products rose by 11.1 trillion won, led by foreign-currency deposits with maturities under two years, reflecting the inflow of export proceeds from large conglomerates.

Time deposits and installment savings with maturities under two years also grew by 8.2 trillion won over the same period, boosted by interest rate increases.

In contrast, monetary trusts with maturities under two years fell by 10 trillion won, weighed down by chipmakers' shareholder return programs and interim corporate tax payments.

By economic sector, households and nonprofit institutions posted a gain of 12.6 trillion won, while other financial institutions rose by 5.2 trillion won. The household and nonprofit category recorded its largest monthly increase in one year and 10 months — since November 2024, when it rose 15.8 trillion won — as deposit products broadly expanded.

Non-financial corporations, by contrast, fell by 3.3 trillion won, reversing course for the first time in 11 months since October 2025, when they declined by 2 trillion won. The drop was driven mainly by chipmakers' increased demand for funds in September, centered on monetary trusts under two years and MMFs.

The narrow money supply measure M1 — which covers only cash, demand deposits and savings accounts — stood at 1,355.2 trillion won, down 0.2 percent from the previous month, marking a third consecutive monthly decline following July and August.


kimstar@heraldcorp.com