The average balance of broad currency (M2) in April was 4,153.9 trillion won, up 2.53 trillion won (0.6%) from the previous month, the Bank of Korea said on the 16th. It rose for a second straight month, with the gain larger than March's 0.4%. The Bank of Korea said the increase reflected a rise in stock investment sidelined cash and a buildup of deposit funds by semiconductor corporations. M2 includes cash, cash-equivalent asset, and short-term financial instruments.
On the day, the Bank of Korea released "April currency and liquidity," which included these details. M2 is the sum of narrow currency (M1)—including payroll accounts (transactional savings deposits) and demand deposits with free withdrawals—and comprehensive asset management accounts (CMA), money market funds (MMF), and time deposits of less than two years.
Within April's M2, short-term financial products including CMA, MMF, and foreign currency deposits increased by 830 billion won. They fell by 190 billion won in March but turned to an increase. The surge is analyzed to be due to a sharp rise in CMA balances where stock investment sidelined cash gathers. Time deposits of less than two years also increased by 1.3 trillion won. Deposit funds of semiconductor corporations, which showed strong exports, increased. Also, M1 in April was 1,371.5 trillion won, up 0.4% from the previous month.
Starting with this release, the Bank of Korea decided to include integrated investment accounts (IMA) of comprehensive financial investment business entities in financial institution liquidity (Lf). Accordingly, it revised all statistics back to December last year, when IMA was first issued. The Bank of Korea explained that while IMA cannot be included in currency due to restrictions on early termination, it can be regarded as financial institution liquidity in that it is securitized according to the contract.