Bank lending rates hit 9-month high in Oct.

SEOUL, Nov. 27 (Yonhap) - South Korean banks' lending rates rose to a nine-month
high in October as market rates climbed amid prospects for an economic recovery,
the central bank said Friday.

The average lending rate for households and companies reached 5.88 percent last
month, up 0.06 percentage point from a month earlier, according to the Bank of
Korea (BOK). The October reading marked the highest level since January when the
corresponding rate stood at 5.91 percent.
Bank lending rates have climbed since May as the government's economic stimulus
efforts and the BOK's aggressive rate cuts pulled the country out of the worst
economic downturn in more than a decade. The central bank cut the rate by a total
of 3.25 percentage points to a record low of 2 percent between October 2008 and
February.
Market rates like returns on certificates of deposit (CDs) have risen on
expectations that the BOK will likely raise the borrowing costs down the road
amid signs of an economic rebound.
Home-backed lending rates, which tie to the yields of CDs, reached 5.9 percent in
October, up 0.13 percentage point from the previous month and hitting a 10-month
high, the BOK said.
Meanwhile, average deposit rates reached 3.51 percent last month, up 0.18
percentage point from a month ago mainly because local banks sold higher-yielding
financial products to secure funds. The October figure marked the highest level
since January when the rate came in at 4.16 percent, it added.
sooyeon@yna.co.kr
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