S. Korean banks' lending rates hit 7-year high in August

SEOUL, Sept. 29 (Yonhap) -- South Korean banks' lending rates reached a seven-year high in August mainly due to a policy rate hike by the central bank, the Bank of Korea (BOK) said Monday.

According to the BOK, the average lending rate for households and companies
reached 7.31 percent, up 0.19 percentage point from a month earlier. The August
figure was the highest since August 2001 when the lending rate reached 7.51
percent.
"The central bank's rate hike in August pushed up local banks' lending and
deposit rates," a BOK official said. "Higher rates came as market rates like
yields on certificates of deposit (CDs) gained."
Yields for CDs and government bonds serve as benchmarks for market rates.
The BOK raised the benchmark seven-day repurchase agreement rate in August by a
quarter percentage point to 5.25 percent, the first increase in a year, in a bid
to curb rising inflation expectations.
The average interest rate for household loans hit a nearly seven-year high of
7.35 percent on the back of higher home-backed lending. The interest rate for
home-backed lending reached 7.16 percent last month, marking the highest since
September 2001 when the BOK began to compile related data.
The average rate for corporate lending gained 0.18 percentage point on-month to
hit an over seven-year high of 7.3 percent last month, the BOK said.
Meanwhile, the average interest rate on deposits rose by 0.24 percentage point to
5.91 percent last month, the highest figure since January 2008 when the rate came
in at 6.01 percent, the BOK added.
sooyeon@yna.co.kr
(END)