Household credit up in Q3 on more credit purchases amid eased virus curbs

Finance

Published: 22 Nov. 2022, 13:35

Household credit up in Q3 on more credit purchases amid eased virus curbs

A banner hung on the wall of a commercial bank in Seoul shows the bank's loan interest rate on Nov. 18. [YONHAP]

Korea's household credit grew in the third quarter of this year despite rising borrowing costs as people expanded spending on borrowed money amid eased virus curbs, central bank data showed Tuesday.

Outstanding household credit had reached 1,870.6 trillion won ($1.37 trillion) as of end-September, up 2.2 trillion won from three months earlier, according to preliminary data from the Bank of Korea (BOK).

Household credit refers to credit purchases and loans for households extended by financial institutions.

Purchases on credit expanded 2.5 trillion won on-quarter to 113.8 trillion won as people spent more on borrowed money after the government lifted almost all coronavirus restrictions, the BOK said.

Household loans, however, shrank 300 billion won over the same period to 1,756.8 trillion won, apparently affected by the central bank's steep rate increases that have sent borrowing costs soaring.

Korea's central bank has hiked its policy rate eight times by a combined 2.5 percentage points since August last year to bring inflation under control. It is widely expected to deliver another rate increase this week.

Yonhap