The ratio, that is, demand deposit withdrawals divided by the average deposit balance, stood at 15.5 for the month of August, according to data from the Bank of Korea (BOK).
This was the lowest figure since January 1985, when the BOK started tracking related data. The previous record was 15.6 posted in May of this year.
The demand deposit turnover rate in Asia’s fourth-largest economy has been steadily declining since it peaked at 95.5 in July 1999.
A low ratio means that households and businesses prefer to put their money in banks rather than investing it for better profits.
Demand deposits, on which banks typically pay little interest, refer to funds held in accounts from which depositors can withdraw at any time without notice.
Demand deposits are classified as belonging to short-term floating funds, which refer to money entering and leaving investments in search of higher profits.
The COVID-19 epidemic, which hit South Korea in late January, has sharply increased uncertainty here by causing the economy to slip and drastically reducing business and household incomes.
According to the BOK, outstanding sight deposits in South Korean banks stood at 311.5 trillion won ($ 273 billion) at the end of August, up nearly 24 percent from December of Last year. (Yonhap)