Stock market waiting funds surged... MMF assets jump by 12 trillion won in a month

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[Financial News] Liquidity in the market expanded again in March. In particular, more than 12 trillion won flowed into Money Market Fund (MMF), sharply increasing short-term waiting funds. Analysts said rising stock market trading and cash inflows related to corporate dividend payments also played a role.
According to the 'March 2026 Money and Liquidity' report released by the Bank of Korea (BOK) on the 13th, Broad Money (M2) in March stood at 4,132.1 trillion won on a seasonally adjusted average balance basis, up 18.5 trillion won, or 0.4%, from the previous month. The M2 growth rate, which had been flat at 0.0% in February, expanded again after one month. On a year-on-year basis using the original series, growth also rose from 4.9% to 5.6%.
M2 is a key monetary indicator that includes cash, demand deposits, checking accounts, and other financial products that can be quickly converted into cash, such as MMF. It is used as a gauge of liquidity trends in the market.
Among individual products, MMF posted the strongest increase. MMF rose by 12.4 trillion won in March, rebounding sharply from a 1.5 trillion won decline in the previous month.
The Bank of Korea explained that the increase reflected, in part, expanded short-term fund management by some other financial institutions, as well as inflows of short-term waiting funds related to taxes and levies amid higher stock market trading. Market participants said the flow of investment waiting funds into short-term financial products has strengthened.
The increase in transferable savings deposits also widened on the back of corporate fund inflows. These deposits rose by 6.5 trillion won in March, exceeding the previous month's increase of 4.1 trillion won. Corporate funds entering the market for dividend payments were cited as a major factor.
By economic sector, non-financial corporations led the increase in money supply. Funds held by non-financial corporations rose by 34.9 trillion won, while households and nonprofit institutions fell by 13.1 trillion won. Other financial institutions increased by 1.6 trillion won, and other sectors, including social security funds and local governments, rose by 200 billion won.
Narrow money (M1) stood at 1,368.7 trillion won on a seasonally adjusted average balance basis, up 0.7% from the previous month. The growth rate widened from 0.1% in February. On a year-on-year basis using the original series, growth also rose from 7.6% to 7.9%.
Among liquidity indicators, Financial Institutions Liquidity (Lf) rose 0.5% from the previous month to 6,194.1 trillion won. By contrast, broad liquidity, the widest liquidity measure, fell 0.4% from the previous month-end to 7,820.5 trillion won on a closing-balance basis. The previous month's growth rate was 1.1%.
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imne@fnnews.com Hong Ye-ji Reporter