SEOUL, Sept 11 (Askume) – South Korean household borrowing rose by the most in more than three years in August due to a record surge in mortgage demand, Bank of Korea data showed on Wednesday.
As of the end of August, domestic bank loans stood at 1,130.0 trillion won ($840.52 billion), a monthly increase of 9.3 trillion won, the largest monthly rise since July 2021.
According to the Bank of Korea (BOK), mortgage loans rose by 8.2 trillion won, the biggest increase since data were released in 2004.
At a meeting with local banks on Tuesday , China’s financial regulator expressed concern about a rapid rise in household debt, saying such financial imbalances could translate into systemic risks. Regulatory chiefs also urged banks to strengthen risk management as authorities tightened lending rules earlier this month.
A Bank of Korea official said, “Domestic credit growth in September is expected to be lower than in August due to government measures and banks’ management efforts.” He also said there were some temporary factors affecting the August data.
The Financial Services Commission said that if the housing market volatility continues or household credit growth accelerates, authorities will promptly and boldly implement additional measures, which are currently under review.
Minutes from last month’s policy meeting showed central bank board members were cautious about cutting interest rates as they remained concerned about rising risks to financial stability despite a drop in inflation.
(1 USD = 1,344.4100 Korean Won)
