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S. Korea's household debt growth slightly accelerates in Dec.

All News 12:00 January 10, 2020

SEOUL, Jan. 10 (Yonhap) -- Household debt extended by banks in South Korea continued to rise and at a slightly increased pace from a month earlier in December, central bank data showed Friday.

Fresh bank loans extended to local households came to 7.2 trillion won (US$6.2 billion) in the month, compared with a 7 trillion-won increase in November, according to the data from the Bank of Korea (BOK).

The reading also marks an increase from a 5.4 trillion-won rise the same month last year.

The BOK partly attributed the increase to a rise in home-backed loans, which came despite what many believe to be unprecedentedly strong government measures to curb real estate speculation announced in mid-December.

Under its latest steps, the government completely banned fresh mortgages or home-backed loans for the purchase of any home valued at more than 1.5 billion won.

In December, fresh home-backed loans amounted to 5.6 trillion won, accelerating from a 4.9 trillion-won increase the month before.

Other bank loans to households rose 1.6 trillion won, slowing from 2.1 trillion won in November, according to the BOK.

Local companies, on the other hand, reduced their net borrowing in December by 6.2 trillion won, marking a sharp turnaround from a 5.9 trillion-won increase in the previous month.

"The amount dropped partly because of companies temporarily reducing their borrowing to meet required debt ratios at the end of the year," the BOK said in a press release.

Outstanding corporate loans stood at 869 trillion won as of end-December, while overall bank loans to local households came to 888.3 trillion won.

Bank deposits net dropped by 200 billion won to 1,749 trillion won.


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