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Money surplus among S.Korean households falls for 3 quarters

Xinhua,December 27, 2017 Adjust font size:

SEOUL, Dec. 27 (Xinhua) -- Money surplus owned by South Korean households fell for three straight quarters this year as households continued to purchase new home with borrowed money, central bank data showed Wednesday.

The net money surplus, which indicates investment money minus borrowed money, for households and non-profit organizations stood at 9.8 trillion won (9.1 billion U.S. dollars) in the July-September quarter, down 0.7 trillion won (0.65 billion U.S. dollars) from the prior quarter, according to the Bank of Korea (BOK).

The investment money refers to fund managed by households such as bank deposit, insurance and stock investment.

The money surplus for households kept sliding from 19.2 trillion won (17.9 billion U.S. dollars) in the fourth quarter of last year to 14.1 trillion won (13.1 billion U.S. dollars) in the first quarter of this year and 10.5 trillion won (9.7 billion U.S. dollars) in the next quarter.

It was attributable to strong demand for new home purchase with borrowed money amid the record-low interest rate. The number of housing transactions increased to 279,000 in the third quarter from 258,000 in the prior quarter.

The BOK cut its benchmark interest rate from 3.25 percent in July 2012 to an all-time low of 1.25 percent in June last year.

The central bank raised its policy rate by a quarter percentage point in late November to 1.5 percent, marking the first rate increase in almost six and a half years. Enditem