Bank deposit rates rebound in June

SEOUL, July 27 (Yonhap) -- South Korean bank deposit rates rebounded from a
record low in June as market rates rose amid prospects for an economic recovery,
the central bank said Monday.
The average deposit rate for households and companies reached 2.96 percent last
month, up 0.12 percentage point from a month earlier, according to the Bank of
Korea (BOK). The deposit rate rebounded for the first time since October 2008.
The average lending rate stood at 5.47 percent in June, up 0.05 percentage point
from the previous month and rising for the second consecutive month, it added.
"As market rates have advanced, bank deposit and lending rates gained in tandem,"
said an official at the BOK.
Bank rates had been on the downward trend since the BOK cut its key interest rate
by a total of 3.25 percentage points to a record low of 2 percent between October
and February in a bid to bolster the slumping economy. But market rates like
returns on bank bonds have recently risen as lenders sold debts to secure funds
amid record-low interest rates and expectations for an economic recovery.
Meanwhile, South Korean banks' loan-deposit spread fell from a 10-year high in
June. The gap reached 2.51 percentage points last month, compared with 2.58
percentage points the previous month. The May spread was the largest since 2.88
percent in May 1999, the central bank said.
sooyeon@yna.co.kr
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