household loans-May tally

▲ This undated file photo shows a pedestrian passing by a bulletin board in Seoul that promotes mortgage loans. (Yonhap)

household loans-May tally

Banks' household loans up for 2nd month in May amid high borrowing costs

SEOUL, June 9 (Yonhap) -- Household loans extended by banks in South Korea rose for the second straight month in May on increased demand for home-backed loans amid high borrowing costs, data showed Friday.

Banks' outstanding household loans came to 1,056.4 trillion won (US$815 billion) as of end-May, up 4.2 trillion won from a month earlier, according to the data from the Bank of Korea (BOK).

The May tally marks the second consecutive month of an on-month rise following a 2.3 trillion won gain in April.

Banks' home-backed loans rose 4.3 trillion won on-month to 807.9 trillion won in May, while unsecured and other types of loans fell 20 billion won to 247.3 trillion won.

Borrowing costs in Asia's fourth-largest economy remain high following the BOK's aggressive monetary tightening aimed at bringing surging inflation under control.

Given an easing of inflation and an economic slowdown, the central bank held its key interest rate steady at 3.5 percent for the third straight time last month.

The rate freezes came after the BOK had delivered seven consecutive hikes in borrowing costs since April last year.

Last year, outstanding household loans slipped for the first time in 18 years amid higher rates.


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