This file photo, taken Oct. 3, 2021, shows information on a bank’s loan programs on the exterior of a lender in Seoul. South Korea’s financial regulator is reviewing further tightening rules on household loans in a bid to curb the fast growth of household debt. (Yonhap)
SEOUL, Aug. 22 (Korea Bizwire) — South Korea’s household credit soared in the second quarter of the year amid high interest rates as home purchases gathered steam, central bank data showed Tuesday.
Outstanding household credit reached 1,862.8 trillion won (US$1.38 trillion) at the end of June, up 9.5 trillion won from three months earlier, according to the preliminary data from the Bank of Korea (BOK).
Household credit refers to credit purchases and loans to households by financial institutions.
The rise in household loans came despite high borrowing costs, driven by the BOK’s series of interest rate hikes to bring inflation under control.
In some cases, eased curbs on homebuying helped increase household loans, according to the central bank.
In January, the BOK raised its key interest rate by a quarter of a percentage point to 3.5 percent, the seventh consecutive increase since April last year.
But since then, the central bank has kept the rate unchanged amid slowing inflation and an economic slowdown.
This week, the central bank is also widely expected to stand pat again.
Of the total credit, household loans stood at a record high of 1,748.9 trillion won at the end of June, up 10.1 trillion won from three months earlier.
Mortgage loans increased by 14.1 trillion won in the second quarter from three months ago, but other types of household loans declined by 4 trillion won over the cited period.
(Yonhap)
