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Banks' lending rates stay flat in October

All News 12:00 November 27, 2020

SEOUL, Nov. 27 (Yonhap) -- South Korean banks' lending rates stayed flat in October, despite rising market rates, central bank data showed Friday.

The average interest rate charged on new bank loans came to 2.66 percent in October, unchanged from the previous month, according to preliminary data from the Bank of Korea (BOK).

In September, banks' lending rates rose for the first time in four months. The rates declined for the third straight month since June due to the impact of the central bank's policy rate cut in May.

The BOK cut the key interest rate to a record low of 0.5 percent in May after delivering an emergency rate cut of half a percentage point in March to cushion the impact of the new coronavirus outbreak.

The central bank kept the base rate steady in November amid heightened economic uncertainties over a new wave of global coronavirus infections.

The average rate for bank deposits, meanwhile, came to 0.88 percent in October, unchanged from September, the BOK said.

South Korean lenders' loan-deposit spread, a gauge of banks' profitability from lending, also stayed flat at 1.78 percentage points in October.

In this photo, taken on Sept. 18, 2020, a bank official explains a loan product to a visiting customer. (Yonhap)


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