Money Supply Grew by 17 Trillion Won in September

According to the 'Money and Liquidity in September 2026' data released by the Bank of Korea on the 13th, the total amount of money in circulation (known as M2) grew by 17.1 trillion won (0.4%) in a single month in September, averaging 4,283.9 trillion won. M2 is a broad measure of money supply that includes cash, demand deposits, and easily liquidated financial products such as time and installment deposits of less than two years. The month-on-month growth rate of M2 slowed from 0.9% in August to 0.4% in September. On a year-on-year basis, it rose 5.5%, but the pace of growth slowed for the third consecutive month, down from August's 5.6%.

By component, other monetary products, including foreign currency deposits of less than two years, increased by 11.1 trillion won, reflecting a build-up of foreign currency deposits driven by factors such as export proceeds flowing in from large corporations. Time and installment deposits of less than two years also rose by 8.2 trillion won. The Bank of Korea explained that "funds flowed in as interest rate advantages increased." In contrast, money trusts of less than two years fell by 10 trillion won, as money moved out due to shareholder returns by semiconductor companies and interim corporate tax prepayments, among other factors.

By economic agent, money holdings by households and non-profit organizations grew by 12.6 trillion won, marking the largest increase since November 2024. Meanwhile, non-financial corporations saw a decline of 3.3 trillion won, their first decrease in 11 months since October of last year, while other financial institutions increased their holdings by 5.2 trillion won. Narrow money (M1), which consists of cash, demand deposits, and instant-access savings deposits, stood at 1,355.2 trillion won, down 0.2% from the previous month.

The Bank of Korea has decided to continue concurrently publishing the total amount of the former benchmark money supply measure, the old M2, which it had originally planned to do only through the end of this year. The central bank said the move is intended to provide convenience for statistics users, and that it will decide and announce the timing of ending the concurrent publication at a later date.