Korea's money supply growth slows to 8-month low in Nov.

SEOUL, Jan. 8 (Yonhap) -- The growth of South Korea's money supply slowed to an
eight-month low in November as local banks curtailed lending and foreign
investors dumped stocks on the Seoul bourse, the central bank said Thursday.
The country's narrower measure of the money supply called the M2 reached 1,426.2
trillion won (US$1.08 trillion) in November, up 14 percent from a year earlier,
according to the Bank of Korea (BOK). November's money supply grew at the slowest
pace since March 2008 when the M2 advanced on-year 13.9 percent.
The M2 covers currency in circulation and all types of deposits with maturity
less than two years at lenders and non-banking financial institutions, though not
with insurers and brokerage houses.
"The growth of lending to households and companies slowed down. A selling spree
of local stocks by foreigners also led the money supply to grow slowly," said Kim
Hwa-yong, a BOK official.
In a separate report, the BOK said the gain in the M2 is estimated to have eased
in December to around 13 percent due to sharp slowdown in bank lending.
Meanwhile, the country's liquidity aggregate amounted to 2,272.1 trillon won as
of the end of November, up 11.5 percent from a year ago, according to the BOK.
The liquidity aggregate, the broadest measure of the nation's money supply,
covers currency in circulation, all types of deposits at financial institutions,
and state and corporate bonds.
The data came a day before the BOK holds its monthly rate-setting meeting.
Economists say the BOK is widely expected to cut its key interest rate by 0.5
percentage point to 2.5 percent to jumpstart the sputtering economy.
In December, the BOK lowered the borrowing costs by a record full percentage
point to an all-time low of 3 percent. Since early October, it has trimmed the
policy rate by a combined 2.25 percentage points.
sooyeon@yna.co.kr
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