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Bank lending rates on fresh household loans rise in Dec.

All News 12:00 January 27, 2016

SEOUL, Jan. 27 (Yonhap) -- Bank lending rates on new household loans rose slightly from a month earlier in December apparently due to a U.S. rate hike, central bank data showed Wednesday.

The average rate for new household loans gained 0.07 percentage points from the previous month to 3.23 percent last month, according to data from the Bank of Korea (BOK).

December marked the second straight month the average rate on new household loans gained from a month earlier.

The average rate on new home-backed loans added 0.08 percentage points from the previous month to 3.12 percent, also marking the second consecutive month of on-month gain.

The rise follows a U.S. rate hike in December, the first of its kind in nearly a decade, that has apparently prompted a mass outflow of foreign capital.

As of Tuesday, foreign investors remained net sellers of South Korean shares for a record 37 consecutive days, offloading over 6 trillion won (US$5 billion) between Dec. 2-Jan. 26.

South Korea's own key interest rate has been kept at a record low level of 1.5 percent since June.

The average lending rate on all new loans here moved up 0.02 percentage points to 3.46 percent in December with the average rate on corporate loans gaining 0.06 percentage points to 3.62 percent, according to the BOK.

The average interest rate paid by local lenders on new deposits increased 0.06 percentage points from a month earlier to 1.72 percent.

In mid-December, the U.S. Federal Reserve increased its benchmark interest rate by a quarter percentage point amid signs of improvements in the world's largest economy.

bdk@yna.co.kr
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