Bank lending rate for South Korean households declined for the first time in four months as expectations for the Bank of Korea (BOK)'s rate hike led to a fall in long-term rates, the BOK data showed Friday.
Rate for new bank loans to households averaged an annualized rate of 3.72 percent in June, down 0.03 percentage points from a month earlier.
The lending rate rose from 3.65 percent in February to 3.75 percent in May, but it turned downward as the BOK's expected rate increase later this year stoked expectations for economic slowdown that led to lower long-term rates that usually affect the household lending rate.
The U.S. Federal Reserve raised its target rate in March and June each to a range of 1.75-2.00 percent, surpassing the BOK's benchmark rate of 1.50 percent.
The BOK has stood pat since it raised the policy rate to the current level in November last year, increasing pressure on the central bank to tighten its monetary policy further.
Higher policy rate can result in economic slowdown, which leads to lower long-term rates.
Rate for bank mortgage loans shed 0.03 percentage point over the month to 3.46 percent in June, with the rate for secured loans falling 0.01 percentage point to 3.14 percent.
However, short-term rates went up on the BOK's expected rate hike. Rate for credit loans, which are affected by the move of short-term rates, rose 0.01 percentage point to 4.57 percent in June.
Rate for bank loans to companies averaged an annualized rate of 3.63 percent in June, down 0.03 percentage points from the previous month.
Rate for new bank loans to households averaged an annualized rate of 3.72 percent in June, down 0.03 percentage points from a month earlier.
The lending rate rose from 3.65 percent in February to 3.75 percent in May, but it turned downward as the BOK's expected rate increase later this year stoked expectations for economic slowdown that led to lower long-term rates that usually affect the household lending rate.
The U.S. Federal Reserve raised its target rate in March and June each to a range of 1.75-2.00 percent, surpassing the BOK's benchmark rate of 1.50 percent.
The BOK has stood pat since it raised the policy rate to the current level in November last year, increasing pressure on the central bank to tighten its monetary policy further.
Higher policy rate can result in economic slowdown, which leads to lower long-term rates.
Rate for bank mortgage loans shed 0.03 percentage point over the month to 3.46 percent in June, with the rate for secured loans falling 0.01 percentage point to 3.14 percent.
However, short-term rates went up on the BOK's expected rate hike. Rate for credit loans, which are affected by the move of short-term rates, rose 0.01 percentage point to 4.57 percent in June.
Rate for bank loans to companies averaged an annualized rate of 3.63 percent in June, down 0.03 percentage points from the previous month.
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