S. Korea’s household credit up by $10.4b in Q2 – BOK

South Korea’s household credit increased by 13.8 trillion won ($10.4 billion) in the second quarter, reaching 1,896.2 trillion won, according to the Bank of Korea‘s (BOK) latest data on Tuesday.

This turnaround follows a decline of 3.1 trillion won ($2.3 billion) in the first quarter. The uptick was attributed to a rise in housing transactions, which climbed to 171,000 in the second quarter from 139,000 in the first.

Despite the increase in household credit, the BOK has maintained its benchmark interest rate at 3.50 percent since January 2023 after a series of hikes totalling three percentage points over the previous 18 months.

Excluding credit purchases, household debt expanded by 13.5 trillion won ($10.1 billion) to 1,780.0 trillion won ($1.34 trillion) at the end of June.

Mortgage loans alone surged by 16.0 trillion won ($12 billion) during the quarter, fuelled by government-backed mortgage programmes and relaxed regulations aimed at supporting the housing market.

Conversely, other household loans, such as credit cards, fell by 2.5 trillion won ($1.9 billion) in the second quarter. Credit purchases added 300 billion won ($225.1 million) in the quarter, recovering from a 2.3 trillion won decline in the first quarter.

Attribution: Bank of Korea data

Subediting: Y.Yasser