Banks’ lending rate down for 2nd month in January

Banks' loan rate declined for the second straight month in January, as the central bank has frozen its key rate for months amid easing inflation and an economic slowdown, data showed Thursday. The average lending rate of banks applied to new loans last month came to 5.04 percent, down 0.1 percentage point from a month earlier, following a 0.12 percentage point fall the previous month, according to the data from the Bank of Korea (BOK). The central bank had kept its key rate frozen at 3.5 percent for the eighth straight time in January. Household loans, however, continued to grow amid an uptick in home prices and an economic slowdown. Household loans extended by banks in South Korea rose for the 10th straight month in January, led by rising home-backed loans. Banks' lending rate on household loans came to 4.68 percent on average in January, down 0.14 percentage point from a month earlier, according to the BOK. Their lending rate for corporate loans also slid 0.1 percentage point to 5.04 percent over the cited period, it added. The rate banks pay for deposits reached 3.67 percent in January, down 0.18 percentage point from the previous month. The spread on banks' lending and deposit rates widened to 1.37 percentage points last month from 1.29 percentage points in December, the BOK data showed. Source: Yonhap News Agency