Household debt at South Korean banks rose in July

Data in South Korea showed that household debt provided by banks rose for the fourth month in a row last July due to increased demand for mortgages amid rising borrowing costs.

Household debts provided by banks amounted to 1.068.1 trillion won (808.9 billion dollars) as of the end of July, up 6 trillion won from the previous month, according to data released by the Central Bank of Korea.

July’s revenue represented a month-on-month increase for the fourth consecutive month after an increase of 5.8 trillion won in June, 4.2 trillion won in May, and 2.3 trillion won in April. It also represents the largest increase in 22 months after a jump of 6.4 trillion won in September 2022.

Mortgage loans at banks increased by 6 trillion won on a monthly basis to 820.8 trillion won in July, while unsecured loans and other types decreased by 10 billion won to 246.1 trillion won during the said period, according to the data. The country’s borrowing costs remain high in light of the central bank’s tight monetary policy aimed at controlling high inflation.

In July, the central bank kept its key interest rate at 3.5% for the fourth time in a row after freezing it in February, April and May, amid the face of foggy growth forecasts and moderate inflation.