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S. Korea's consumer confidence falls in 3 months after policy rate hike

Xinhua,December 27, 2017 Adjust font size:

SEOUL, Dec. 27 (Xinhua) -- Confidence among South Korean consumers over economic situations fell for the first time in three months as the Bank of Korea (BOK) raised its benchmark interest rate last month, central bank data showed Wednesday.

The composite consumer sentiment index (CCSI) stood at 110.9 in December, down 1.4 points from the previous month, BOK data showed. It marked the first fall after rising in October and November.

The decline followed the BOK's interest rate hike by a quarter percentage point in November to 1.5 percent, the first increase in almost six and a half years.

Higher borrowing costs increased debt-servicing burden for households, of which debts had rapidly expanded in recent years amid the record-low policy rate.

Sub-indices lost ground. The CSI for current economic situations slipped 3 points over the month to 95 in December, with the index for prospective economic conditions dipping 3 points to 105.

The figure for prospective interest rate gained 2 points to 132, keeping an upward trend for the third consecutive month amid expectations for higher borrowing costs.

Inflation expectations, which reflect expectations among consumers for headline inflation over the next 12 months, stood at 2.5 percent in December, unchanged from the prior month. Enditem