South Korea’s Bank Lending Rates Dip for Seventh Month in Row
(MENAFN) South Korea’s bank lending rates have declined for the seventh consecutive month, reflecting ongoing reductions in the central bank’s policy rate, official data released Wednesday confirmed.
The Bank of Korea (BOK) reported that the weighted average interest rate on new bank loans fell by 0.08 percentage points in June, landing at an annualized 4.09 percent. This marks a steady downward trend that began last December.
Following four separate 25-basis-point cuts—two in late 2024 and two more in February and May—BOK’s benchmark interest rate now stands at 2.50 percent.
Household loan rates also edged lower, slipping 0.05 percentage points to 4.21 percent in June compared to May. Mortgage loan rates for households, however, increased slightly by 0.06 percentage points, reaching 3.93 percent, while credit loan rates decreased sharply by 0.18 percentage points to 5.03 percent.
Corporate loan rates continued their downward path, falling 0.10 percentage points to 4.06 percent in June. Lending rates for large companies dropped by 0.15 percentage points to 4.00 percent, and rates for small businesses declined 0.06 percentage points to 4.11 percent.
Additionally, the weighted average interest rate on new bank deposits decreased by 0.08 percentage points from the previous month, settling at an annualized 2.55 percent in June.
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