Off the wire
• First human H7N9 case this winter reported in S. China  • Weightlifting world champ's namesake wins in same class 10 years later  • Sri Lanka says no travel warnings to countries with increased security  • Urgent: Warplane crashes near Syria-Turkey border  • Feature: George Schaller, wild at heart  • Mustafa Denizli appointed as new Galatasaray coach  • China treasury bond futures close higher Tuesday  • China Hushen 300 index futures close higher Tuesday  • NBA results  • NBA Standings  
You are here: 　 Home

S. Korea's household debts hit record high on record-low rate

Xinhua, November 24, 2015 Adjust font size:

South Korea's household debts hit a record high, posting the largest quarterly growth amid the record-low interest rate, central bank data showed Tuesday.

Household credit, including household debts in financial institutions, insurers and private lenders as well as credit purchase, amounted to 1,166.04 trillion won (1.01 trillion U.S. dollars) as of end-September, according to the Bank of Korea (BOK). It marked the largest since the bank began to compile the data in the fourth quarter of 2002.

The figure was up 34.5 trillion won from three months earlier, logging the largest quarterly increase. It was also up 109.6 trillion won from a year earlier.

The fast increase came as the BOK cut its benchmark interest rate by 25 basis points in August and October last year before lowering it further in March and June this year to an all-time low of 1.5 percent.

Household debts reached 1,102.6 trillion won at the end of September, accounting for the vast majority of the household credit. It was up 30.6 trillion won from three months ago.

The massive household debts are feared to detonate bubble in the housing market as the BOK is expected to raise interest rate following the rate hike in the United States with a certain time gap.

Higher borrowing costs would be a burden to households, which are already struggling with lower wage growth and economic slowdown. Endit