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S. Korea's household lending slows down in Feb.

2018/03/14 12:00

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SEOUL, March 14 (Yonhap) -- South Korea's household lending by banks slowed down last month as the Seoul government intensifies its policy efforts to control the real estate market, central bank data showed Wednesday.

Outstanding household loans from lenders came to 772 trillion won (US$723 billion) as of the end of February, according to the data by the Bank of Korea (BOK).

The total marked a 2.5 trillion-won increase from a month earlier, down slightly from a 2.7 trillion-won rise in January.

But for the first two months of the year, household lending expanded a combined 5.2 trillion won, marking the largest two-month gain since 2008, when the central bank started to compile such data.

Mortgages climbed 1.8 trillion won on-month to 573.2 trillion won last month due to a steady rise in home transactions, especially in the capital city.

The BOK said other bank loans, including lending through an overdraft line of credit, gained 0.8 trillion won on-month to 197.9 trillion won as New Year's bonuses reduced demand for loans.

The South Korean government has churned out a series of measures to tighten mortgage rules for owners of multiple homes as part of efforts to ensure mounting household debt does not hurt the nation's economy.

The total household credit of Asia's fourth-largest economy reached a record 1,450.9 trillion won in December, which economists fear could dampen consumer spending going forward and hold up growth.

In line with the move, the central bank raised the key rate by a quarter percentage point to 1.5 percent on Nov. 30 for the first time in nearly six and a half years.