South Korea's money supply continued to increase in August from a month earlier amid an extended tightening policy mode, central bank data showed Wednesday.

The country's M2, a key gauge of the money supply, stood at 4,062.6 trillion won (US$2.975 trillion) in August, up 0.2 percent from the previous month, according to the preliminary data from the Bank of Korea (BOK).

The M2 is a measure of the money supply that counts cash, demand deposits and other easily convertible financial instruments.

The central bank has been implementing a restrictive mode as it delivered seven consecutive hikes in borrowing costs from April 2022 to January 2023 to tame soaring inflation in Asia's fourth-largest economy.

Earlier this month, the BOK cut its key interest rate by a quarter percentage point to 3.25 percent, ending its restrictive policy amid moderating inflation and faltering domestic demand.