Turnover rate of deposits hits record low

[THE INVESTOR] The turnover rate of deposits in South Korea hit a record low in more than 11 years in July, according to the Bank of Korea on Sept. 19.

The deposit turnover rate for July recorded 20.3, the lowest since February 2005 when it stood at 18.1, the central bank said.

The rate is calculated monthly based on the amount of withdrawals and the average account balance. Less turnover means fewer withdrawals, signaling that people are holding on to their cash instead of spending or investing.

The Investor

In July, the money supply in South Korea grew nearly 7 percent on-year due to increased deposits, both in local and foreign currencies, by households and companies, the central bank said.

The nation’s M2 -- a measure of the money supply counting the currency in circulation, including bank debentures and deposits with a maturity of less than two years, along with stock investments -- totaled 2,348.3 trillion won (US$2.10 trillion) in July, up 6.9 percent from a year earlier, according to the BOK. It marks a 0.7 percent rise from June.

(theinvestor@heraldcorp.com)