Household loans extended by South Korean lenders increased at a faster pace in June compared with the previous month amid low lending rates, central bank data showed Wednesday.
Outstanding household loans extended by local banks totaled 594.5 trillion won ($524.5 billion) as of the end of last month, adding 8.1 trillion won from May, according to the Bank of Korea.
The monthly gain was smaller than the record 8.5 trillion-won gain in April but still bigger than the 7.3 trillion-won increase posted in May.
The BOK attributed the on-month increase to continued demand for mortgage loans, as well as robust property transactions. The number of apartment transactions in Seoul reached 11,300 units last month, nearly double the average 5,800 units in the month of June between 2006 and 2014.
The data came a day ahead of the BOK’s monthly rate-setting meeting.
In a poll by Yonhap Infomax, the financial news arm of Yonhap News Agency, all 17 analysts projected a rate freeze this month following a rate cut in June aimed at preventing the economic fallout of Middle East Respiratory Syndrome outbreak.
All but one analyst said the central bank is likely to hold the rate at the current 1.5 percent level until the end of the year to monitor economic indicators and fend off household debt risks.
The country’s bulky household debt is not yet considered a systemic risk for Asia’s fourth-largest economy but has long been an economic bugbear for policymakers as it constricts consumption and may potentially trigger risks. (Yonhap)
