South Korea's household debts rose faster in April amid the record-low borrowing cost, central bank data showed Monday. Debts owed by households to banks reached 718.6 trillion won (638.8 billion U.S. dollars) as of end-April, up 4.6 trillion won from a month earlier, according to the Bank of Korea (BOK).
The monthly debt growth gained speed this year from 58.5 billion in January to 2.9 trillion won both in February and March.
The April growth more than doubled an average of 2.2 trillion won increase tallied in Aprils between 2010 and 2014.
The rapid increase was attributable to the record-low interest rate. The BOK lowered its benchmark rate from 3.25 percent in July 2012 to an all-time low of 1.25 percent in June last year.
Pressures were increasing on the BOK to raise its policy rate as the U.S. Federal Reserve lifted its benchmark rate to a range of 0.75-1.00 percent and indicated two more hikes for the rest of this year.
Among the total, mortgage loans came in at 541.8 trillion won as of end-April, up 3.3 trillion won from a month ago.
Demand increased for home-backed loans during the springtime home-moving period. Other credit loans gained 1.3 trillion won over the month to 175.9 trillion won at the end of last month.
It was the fastest expansion in five months. (1 U.S. dollar equals to 1124.90 South Korean Won)
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