South Korea's annual money supply growth rose to a five-year high in January, the central bank said Thursday, continuing a double-digit growth rate for the 17th straight month.
The country's liquidity aggregate reached 2,078.1 trillion won ($2.19 trillion) in January, up 13 percent from a year earlier, the Bank of Korea (BOK) said. January's money supply growth was the steepest since January 2003 when it gained 13.6 percent.
The liquidity aggregate, the broadest measure of money supply, covers currency in circulation, all types of deposits at financial institutions and state and corporate bonds.
"South Korea's money supply growth picked up mainly because the government and companies sold more debts and liquidity provided by financial institutions gained," the bank said in a statement.
The data comes a day before the BOK holds a monthly rate-setting meeting. The BOK is widely expected to freeze its key interest rate for March for the seventh straight month at 5 percent as it juggles high-flying inflation and growing concerns
over a slowing economy.
Starting in March, the BOK will change its policy rate from the call rate, or the interest on overnight inter-bank loans, to the rate on 7-day repo (repurchase agreement) deals to enhance the effectiveness of its monetary policy.
Repos allow the BOK to sell holdings of government bonds to financial firms with an agreement to buy them back on a specific date at a fixed price.
The BOK has held steady the key rate target since its first back-to-back increases in July and August to curb rising liquidity, which could stoke inflation and an asset bubble. (Yonhap)