South Korea's money supply continued to grow in January, partly on an increase in funds held by local households, central bank data showed Tuesday.

The country's M2 came to 2,927.5 trillion won ($2.36 trillion) as of end-January, up 0.7 percent from a month earlier, according to preliminary data from the Bank of Korea (BOK).

From a year earlier, the reading marks a 7.8 percent rise.

M2 is a measure of the money supply that counts the currency in circulation, including bank debentures and deposits with a maturity of less than two years, along with stock investments. It is a key economic indicator closely monitored by the authorities.

January marks the 16th consecutive month of increase since September 2018, when the M2 inched down 0.1 percent from a month earlier.

Funds held by households and nonprofit organizations gained 11.8 trillion won from a month earlier in January, while those held by local firms added 200 billion won.

Funds held by financial institutions increased by 4.7 trillion won.

By product, money invested in money market funds added 10.9 trillion won, while bank deposits gained 9.6 trillion won. (Yonhap)