Seoul, Sep 16 (IANS) South Korea’s money supply increased for the fourth consecutive month in July, fuelled by a rise in funds and deposits, central bank data showed on Tuesday.

The country’s M2, a key gauge of the money supply, stood at 4,344.3 trillion won ($3.13 trillion) in July, up 0.8 percent from a month earlier, according to the preliminary data from the Bank of Korea (BOK).

The figure has been on an increase since April. The M2 is a measure of the money supply that counts cash, demand deposits and other easily convertible financial instruments, reports Yonhap news agency.

The on-month increase came as deposits and stock fund inflows increased. South Korea’s central bank kept its benchmark interest rate unchanged for the second consecutive time at 2.5 percent last month in a bid to ensure financial stability amid persistent concerns about rising housing prices and household debt.

In May, the BOK cut its base rate by a quarter percentage point.

Meanwhile, import prices rose for the second consecutive month in August despite falling global oil prices, mainly due to a weaker Korean won, central bank data showed.

The import price index went up 0.3 percent last month from a month earlier, following a 0.8 percent hike, according to preliminary data from the Bank of Korea (BOK).

The increase came as the local currency fell to 1,389.66 won against the U.S. dollar in August from an average of 1,375.22 won per dollar in July, the BOK said.

Import prices are a key factor of inflation as they affect production costs and consumer prices through the supply chain.

The average price of Dubai crude, South Korea’s benchmark, stood at US$69.39 per barrel in August, down 2.1 percent from the previous month.

The export price index also rose for the second consecutive month in August, gaining 0.7 percent from the previous month, the data showed.

“In September, volatility in the won-dollar exchange rate and global oil prices is not significant, though we need to monitor the situation given domestic and global uncertainties,” BOK official Lee Moon-hee told a press briefing.

—IANS

na/