Data from the Bank of Korea (BOK) released Wednesday showed that the interest rate for household loans dropped for the second month in a row in August. This is due to the central bank’s decision to keep its key rate unchanged for months in light of easing inflation and a slowing economy.
The average interest rate for new household loans in August was 5.1 percent, lower than the 5.11 percent in July. The Bank of Korea has not changed its key rate of 3.5 percent since April 2022, following seven consecutive rate hikes from April 2022 to January 2023.
The deposit rate also decreased from 3.68 percent in July to 3.65 percent in August. The difference between the lending and deposit rate widened from 1.43 to 1.45 percentage points.
This file photo, taken July 18, 2023, shows information on a bank's loan programs at a lender in Seoul. (Yonhap)
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