SEOUL, South Korea’s household credit growth slowed in the fourth quarter of the year as home-backed loans took a breather amid high borrowing costs, central bank data showed Tuesday.
Outstanding household credit reached 1,886.4 trillion won (US$1.41 trillion) at the end of December, up 8 trillion won from three months earlier, according to the preliminary data from the Bank of Korea (BOK).
The fourth-quarter rise slowed from the previous quarter’s record high of 17 trillion won, according to the data.
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 January last year, 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 s
lowdown.
Of the total, household loans stood at a record high of 1,768.3 trillion won at the end of December, up 6.5 trillion won from three months earlier.
Mortgage loans increased by 15.2 trillion won during the fourth quarter of last year, slowing from a record high of 17.4 trillion won in the third quarter, and other types of household loans fell 8.7 trillion won over the cited period, compared with the previous quarter’s 2.9 trillion won fall.
Source: Yonhap News Agency