Korea's M2 money supply grew from a month earlier in March on a rise in cash flows and short-term deposits, central bank data showed Thursday.

The M2 came to 2,296.8 trillion won ($1.97 trillion) as of end-March, up 0.8 percent from 2,279.1 trillion won tallied a month earlier, according to preliminary data from the Bank of Korea (BOK).

M2 refers to currency in circulation, including bank debentures and deposits with a maturity of less than two years, along with stock investments. It, however, does not include government or corporate bonds.

The growth in March marks an acceleration from a 0.5-percent on-month increase in the previous month. From a year earlier, the March figure also marks a 7.8-percent surge.

The BOK attributed the increase in money supply to a rise in deposits and securities investment.

As of the end of March, savings deposits gained 6.9 trillion won from the previous month with the amount in demand deposit accounts also rising 3.8 trillion won over the cited period, the central bank data showed.

The amount of cash in circulation also gained 4.4 percent on-month to some 78.73 trillion won as of end-March.

Korea's money supply has been on a steady rise since the start of 2015, or after the BOK began slashing its policy rate in August 2014 to help bolster growth in Asia's fourth-largest economy.

The central bank has stood pat on its key rate since June 2015 after sending it to a record low level of 1.5 percent through four rate cuts in less than a year.

The BOK is set to hold its monthly rate-setting meeting on Friday, where it is widely expected to extend its wait-and-see mode for another month.

In an earlier poll conducted by Yonhap Infomax, the financial news arm of Yonhap News Agency, 16 out of 18 economists surveyed project a rate freeze in May. (Yonhap)