The Bank of Korea (BOK) reported on Monday that overall money supply increased by 0.5% month-on-month and 7.5% year-on-year in January, signaling rising liquidity in the financial system. Cash and demand deposits also increased by 0.6% month-on-month and 5.9% year-on-year. Financial institutions’ liquidity rose by 0.4% from the previous month, while broad liquidity increased by 0.8%. Corporate liquidity holdings rose by $14.7 billion (21.2 trillion won), while household and nonprofit holdings increased by $2.7 billion (3.9 trillion won). The BOK highlighted that the liquidity increase reflects lower loan interest rates and increased capital availability.

The Financial Services Commission (FSC) reported on the same day that household loans increased by about $3 billion (4.3 trillion won) in February, reversing a decline of $622 million (900 billion won) in January. The rise was attributed to lower loan interest rates and increased housing demand driven by the start of the school term and a more active real estate market. The increase was particularly noticeable in Seoul, where easing of real estate regulations has fueled expectations of higher property prices. Banks reported that loan activity slowed in early March but remains elevated compared to last year.