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S. Korea's household debts post record monthly growth in October

Xinhua, December 8, 2015 Adjust font size:

South Korea's household debts posted a record monthly growth in October on the back of stronger demand for mortgage and credit loans, central bank data showed Tuesday.

Debts owed by households to deposit-takers, including banks and non-bank deposit-taking institutions, amounted to 792.4 trillion won (672.7 billion U.S. dollars) as of the end of October, up 11.8 trillion won from a month earlier, according to the Bank of Korea (BOK).

The October increase surpassed the previous high of a 10.1 trillion won growth tallied in April amid the record-low borrowing costs.

The BOK cut its benchmark interest rate by 25 basis points in March and June to an all-time low of 1.5 percent to stimulate the lackluster economy.

Including the mortgage loans transferred to the state-run Korea Housing Finance Corporation (KHFC) to securitize, the household debt growth in October increased to 12 trillion won.

The outstanding household debts extended by deposit-takers, including the transferred mortgage loans, reached 899.8 trillion won as of end-October.

Demand for mortgage loans led the record monthly increase in household debts. Home-backed loans grew by 7.5 trillion won in October amid the brisk home transactions.

Credit loans expanded by 4.3 trillion won in October due to the government's measures to reinvigorate consumer spending that resulted in a recovery in domestic demand. Enditem