Household credit, which refers to debts owed by households to banks and other lenders in addition to the purchase on credit, stood at 1,867.0 trillion won (1.44 trillion U.S. dollars) at the end of December, down 4.1 trillion won (3.2 billion dollars) from three months earlier, according to the Bank of Korea (BOK).
It marked the largest-ever quarterly decline, posting the first slide in almost 10 years since the first quarter of 2013 on the back of higher borrowing costs.
The central bank began to tighten its monetary policy stance in August 2021, hiking its key rate from a record low of 0.50 percent to 3.50 percent in January this year.
Excluding the purchase on credit, the household debts dipped 7.5 trillion won (5.8 billion dollars) from three months earlier to 1,749.3 trillion won (1.35 trillion dollars) at the end of December. It was the fastest-ever quarterly reduction.
Mortgage loans to households increased 4.7 trillion won (3.6 billion dollars) during the October-December quarter, but credit loans plunged 12.2 trillion won (9.4 billion dollars), continuing to slide for the fifth straight quarter.
The purchase on credit gained 3.4 trillion won (2.6 billion dollars) from three months earlier to hit a record high of 117.7 trillion won (90.8 billion dollars) at the end of December.
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