SEOUL, Dec. 31 (Korea Bizwire) — Banks’ rates charged on new household loans in November hit the highest level in over a decade, affected by the central bank’s aggressive rate increases to tame inflation, data showed Friday.
Banks’ household lending rate applied to new loans last month stood at 5.57 percent per annum on average, up 0.23 percentage point from a month earlier, according to the preliminary data from the Bank of Korea (BOK).
It was the highest level since March 2012, when the rate rose to 5.62 percent.
November’s ascent appears to be in line with the BOK’s series of policy rate increases as part of efforts to bring inflation down. The BOK’s rate serves as a benchmark for borrowing costs in the market.
The BOK has raised the rate by a combined 2.75 percentage points since August last year to tame inflation. The rate currently stands at 3.25 percent.
Banks’ home-backed lending rate edged down 0.08 percentage point on-month to 4.74 percent in November.
Of the total household lending made last month, fixed-rate loans accounted for 36.8 percent, up 7.8 percentage points from a month earlier.
The rate charged on deposits also went up 0.28 percentage point to 4.29 percent. This marked the highest point since December 2008, when it advanced to 5.58 percent.
The spread on banks’ lending and deposit rates widened 0.1 percentage point to 1.35 percent last month, the first increase in three months, the data showed.