S. Korea’s household credit hits record high in Q3

SEOUL, Nov. 19 (Xinhua) — South Korea’s household credit hit a fresh record high in the third quarter due to strong demand for mortgage loan, central bank data showed Tuesday.
Household credit, which refers to debts owed by households to banks and other lenders in addition to the purchase on credit, stood at 1,913.8 trillion won (1.37 trillion U.S. dollars) at the end of September, up 18.0 trillion won (12.9 billion dollars) from three months earlier, according to the Bank of Korea (BOK).
It marked the largest amount since relevant data began to be compiled in 2002, continuing to grow for the second successive quarter after swelling 13.4 trillion won (9.6 billion dollars) in the April-June quarter.
The record household credit was attributable to robust demand for home-backed loan, affected by expectations for interest rate cuts.
The BOK cut its benchmark interest rate by 25 basis points to 3.25 percent in October, marking the first rate decrease in almost four and a half years since May 2020.
Excluding the purchase on credit, household debt expanded 16.0 trillion won (11.5 billion dollars) from three months earlier to 1,795.8 trillion won (1.29 trillion dollars) at the end of September.
Mortgage loan to households jumped 19.4 trillion won (13.9 billion dollars) during the July-September quarter amid the eased regulations to prop up the faltering housing market.
Other loans to households, such as credit loan, reduced 3.4 trillion won (2.4 billion dollars) in the third quarter.
The purchase on credit gained 2.0 trillion won (1.4 billion dollars) in the cited quarter, keeping an upward trend for the second successive quarter. ■