SEOUL : South Korean households’ borrowing slumped in January by the biggest monthly amount in at least 19 years, central bank data showed on Thursday, with demand curtailed by rising interest rates.
The country’s total household borrowing from banks shrank by 4.6 trillion won ($3.64 billion) in January, compared with a 0.3 trillion won increase in December, to stand at 1,053.4 trillion by the end of the month, according to the Bank of Korea.
It was the biggest monthly decrease since the central bank started the data series in January 2004.
The decline was due to high interest rates, tightened loan regulations on debt-to-service ratio and seasonal factors linked to bonus payments for the Lunar New Year’s holiday, the BOK said in a statement.
In January, the BOK raised its policy interest rate by 25 basis points to 3.50 per cent, the highest since late 2008, and suggested its 1-1/2-year rate-hike campaign had ended.
($1 = 1,264.7500 won)