An estimated 800 trillion won of floating money is looking for places to park due to the low interest regime. According to the Bank of Korea and the Financial Investment Association on March 16, Yonhap News reported, the balance of short-term floating funds as of the end of January this year was 800,726 billion won, the record-high level.
Of this, cash was 65.0 trillion won, demand deposits of 143.6 trillion won, money market deposit accounts of 370.5 trillion won, money market funds of 70.4 trillion won, cash management accounts of 39.1 trillion won, certificates of deposit of 15.9 trillion won, and repurchase agreements of 8.3 trillion won.
In addition, 71.5 trillion won of time deposits with a length shorter than six months and 16.4 trillion won of investors' deposits with securities firms were added to calculate the floating money balance.
The volume of short-term floating funds under the same definition has increased to 666.4 trillion won in 2012 from 539.6 trillion won in 2008. Its growth rate fell short of the nominal GDP growth rate. In 2013, however, the figure increased 7.0 percent to 712.9 trillion won, followed by 11.5 percent in 2014 to 794.8 trillion won, finally reaching the 800-trillion-won level in January this year.
by Lee Jae-seung
