Data from the Bank of Korea (BOK) revealed that the average rate of household loans applied to new loans last month was 5.11 percent, a decrease from the 5.17 percent the month prior. This is the result of the central bank’s decision to pause their rate hike campaign in light of the moderating inflation and economic slowdown.
The BOK has held the key interest rate steady at 3.5 percent for the past five months, succeeding the seven consecutive rate hikes from April 2022 to January 2023. Banks’ lending rates have been on the rise since then.
The rate banks charged for deposits also dropped to 3.68 percent in July from 3.69 percent the previous month, resulting in a spread of 1.43 percent on banks’ lending and deposit rates, 0.05 percentage point lower than before.
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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