The amount of money in circulation in August increased by nearly 5.6 trillion won, marking a rise for the fifth straight month. The total balance topped 4,400 trillion won, hitting an all-time high.
According to "currency and liquidity for Aug. 2025," released by the Bank of Korea on the 15th, M2 (broad currency, average balance) in August rose 5.58 trillion won (1.3%) from the previous month to 4,400.2 trillion won.
This is a record high and increased for five consecutive months. The pace of growth widened from the previous month (+0.8%). The year-over-year growth rate was tallied at 8.1%.
M2 is a broad currency indicator that includes money market funds (MMFs), time deposits and installment savings of less than two years, revenue securities, and repurchase agreements (RPs) in addition to narrow money (M1), such as cash, demand deposits, and passbook savings deposits. It generally refers to the amount of currency in circulation.
By product, revenue securities increased by 1.28 trillion won, led by bond-type funds, narrowing from a month earlier (+1.53 trillion won). Passbook savings deposits increased by 1.43 trillion won, with the increase roughly doubling from the previous month (+710 billion won). This was influenced by temporary deposits of local government fiscal execution funds and inflows of investment standby funds.
Time deposits and installment savings expanded sharply from a 400 billion won increase to an 8.3 trillion won increase. This was attributable to some banks' attracting deposits to manage their loan-to-deposit ratios.
By sector, corporations increased by 2.59 trillion won, centered on revenue securities and time deposits and installment savings. Households and nonprofit organizations increased by 1.69 trillion won. Other financial institutions rose by 1.04 trillion won, centered on time deposits and installment savings, and other sectors also increased by 460 billion won.
The average balance of narrow money (M1) was 1,312.8 trillion won, up 1.5% from the previous month. The increase widened slightly from the previous month (+1.2%). Financial institution liquidity was 5,970.6 trillion won, up 1.1% from the previous month. Broad liquidity was 7,458.4 trillion won, up 0.6% from the end of the previous month.