RTTNews - South Korea's velocity of money, or the speed at which the money circulates within the economy, dropped to its lowest level in the history of the series in the first quarter, reports said citing the Bank of Korea.

The velocity of money, calculated by dividing the GDP by the M2 money supply, decreased to 0.687 in the first quarter. This has been been the first time ever the value has fallen below the 0.7 mark. In the fourth quarter, the value was 0.703.

Velocity of money is important to measure the rate at which money in circulation is used for purchasing goods and services. The slowdown in the velocity of money was a sign of stagnant conditions in the economy, reports said.

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