S. Korea's household loans up for 8th month

SEOUL, Nov. 17 (Yonhap) -- South Korean bank loans to households rose for an
eighth month in September amid growing demand for home-backed loans, the central
bank said Monday.

Outstanding household loans by local lenders stood at 507 trillion won (US$359.6
billion) as of the end of September, up 0.8 percent, or 3.9 trillion won, from a
month earlier, according to the Bank of Korea (BOK).
Household lending has been on the upturn since January although the rate of
monthly growth decelerated somewhat in September from a 0.9 percent or 4.3
trillion won growth in August, said the BOK.
"A rise in mortgage loans boosted overall household lending as more residents
borrowed to move into new apartments," said the BOK.
Home-backed loans, which account for the bulk of total household lending,
increased 926.8 billion won to 252 trillion won, with mortgage loans rising 1.66
trillion won to 234.6 trillion won.
The data comes as a weaker won and high inflation are eating into household
purchasing power, damping overall domestic demand. Consumer spending, one of main
growth engines, inched up just 0.1 percent in the July-September period from
three months earlier when it first dropped since 2004.
The won has fallen almost 33 percent against the greenback this year while annual
growth of producer prices, a barometer of future consumer inflation, still
remains at 10.7 percent as of October.
Amid signs of economic downturn, the BOK slashed its key interest rate in early
November in an effort to bolster the economy. In a monthly policy meeting, the
BOK lowered the benchmark seven-day repo rate by a quarter percentage point to 4
percent, the lowest level since 2006, cutting a combined 1.25 percentage point in
the span of a month.
pbr@yna.co.kr
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