Banks’ Household Loans Increase for Fourth Month in July Due to Housing Market Recovery


SEOUL, Aug. 9 (Yonhap) — Banks in South Korea saw a rise in household loans for the fourth consecutive month in July, as demand for home-backed loans increased despite high borrowing costs, according to data released Wednesday.

Total outstanding household loans reached 1,068.1 trillion won (US$808.9 billion) at the end of July, a 6 trillion won increase from the previous month, the Bank of Korea (BOK) reported.

This marks the fourth month of growth in a row, with a 5.8 trillion won rise in June, 4.2 trillion won increase in May, and a 2.3 trillion won gain in April, as well as the largest increase in 22 months since a 6.4 trillion won jump in September 2022.

Banks’ home-backed loans rose 6 trillion won on-month to 820.8 trillion won in July, while unsecured and other types of loans decreased by 10 billion won to 246.1 trillion won.

Borrowing costs in the Asian nation remain high following the BOK’s aggressive monetary tightening to control inflation.

In July, the BOK kept its benchmark rate unchanged at 3.5 percent, the fourth straight month of a rate freeze, due to a weak economic outlook and moderating inflation.

The rate freezes followed seven consecutive rate hikes since April last year.

Last year, outstanding household loans decreased for the first time in 18 years, largely due to higher rates.

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