Last November’s money move: ‘Out of deposits and into stocks’

Financial News reported that as the stock market rebounded in November last year, funds flowed out of time and savings deposits and into the stock market. While household funds led to a decline in bank deposits, the shift of money into financial markets effectively brought the growth of Broad Money (M2) to a halt.
According to the “Monetary and Liquidity Statistics for November 2025” released by the Bank of Korea (BOK) on the 14th, the seasonally adjusted average balance of Broad Money (M2) in November 2025 was 4,057.5 trillion won, down 1.9 trillion won from the previous month. The growth rate was 0.0%, marking a flat reading for the second consecutive month.
The outflow of funds from time and savings deposits was particularly notable. Time and savings deposits with maturities of less than two years saw their decline widen from 500 billion won in the previous month to 13 trillion won in November. The BOK explained that improved investor sentiment driven by rising stock prices led deposit funds to move into risk assets such as the stock market.
By sector, households and nonprofit organizations led the money move, with their funds—mainly from time and savings deposits—decreasing by 12.3 trillion won. Other sectors, centered on demand deposits, also saw a decline of 6.3 trillion won.
In contrast, demand for funds from corporations and financial institutions continued. Nonfinancial corporations increased their holdings, mainly in time and savings deposits, by 11 trillion won, while other financial institutions boosted their funds, primarily in financial debentures and money trusts, by 8.7 trillion won. This is seen as the result of some banks raising funds to manage their Liquidity Coverage Ratio (LCR).
By product type, financial debentures with maturities of less than two years increased by 4.2 trillion won, and market-based instruments also swung to an increase of 2.5 trillion won. In contrast, as household funds flowed out, deposit-type products showed a declining trend.
The average balance of narrow money (M1) stood at 1,332.4 trillion won, edging up just 0.1% from the previous month. The year-on-year growth rate also slowed to 6.9%. Financial Institutions Liquidity (Lf) and broad liquidity (Liquidity Aggregates (L)) rose by 0.1% and 0.4%, respectively, maintaining a modest upward trend.
imne@fnnews.com Hong Ye-ji Reporter