2. The central bank of South Korea. It was
founded on June 12, 1950 under the Bank of
Korea Act. The primary purpose of the Bank is
to pursue price stability.
The benchmark interest rate in South Korea
was last recorded at 2.75 percent. Interest
Rate in South Korea is reported by the Bank of
Korea
3. In South Korea the interest rates decisions are
taken by the Bank of Korea’s (BOK) Monetary
Policy Committee. The official interest rate is
the Bank of Korea Base Rate which was
changed from overnight call rate on March
2008.
4.
5. When reference is made to the South Korean
interest rate this often refers to the Bank of
Korea base rate. Before, the Korean interest rate
was called the overnight call rate, but since
March 2008 the term Bank of Korea base rate or
base rate is being used. By changing the Bank of
Korea base rate the central bank of Korea is
influencing the interest rate of products like
mortgages, credit and savings accounts. Doing
so the consumption and investment levels are
being influenced which has an effect on price
levels and therefor on inflation
6.
7. All consumer lending areas continued to grow in 2012 in
both gross lending and outstanding terms. However,
growth was slightly slower than in 2011, except within
education lending. Although growth within consumer
lending is slowing, the general picture within consumer
lending is not a very optimistic one. According to
Statistics Korea, the total consumer Debt-to-Income
(DTI) ratio is way above the OECD average. In addition,
Korea Housing Finance Corporation statistics show the
risky level of total consumer lending in South Korea.
8. Added government supporting loan services is
expected over the forecast period. Since these
government funds provide low interest rates to
consumers, commercial banks and secondary
financial institutes could be forced to lower interest
rates in order to compete with these loan services.
This may be good for consumers in the short term
due to cheap interest expenses. However, in the long
term this will have a bad impact on the market.
9. 1
South Korean banks were expected to
tighten their lending practices in the
first quarter due to the predicted credit
risk expansion amid the economic
slowdown, central bank data showed
Thursday.
The figure marked the lowest
since minus 4 tallied in the Lending attitude index, which
fourth quarter of 2009. Local gauges local banks‘ lending
lenders replied that debt- practices over the next three
servicing capabilities of both months, stood at minus 2 for
companies and households the January-March period,
would weaken due to the down from 2 in the previous
persistent risk factors such as quarter, according to the
the eurozone fiscal crisis and the
Bank of Korea (BOK).
global economic downturn.
10. Average annual rate on bank
deposits declined 10 basis
points from a month earlier
Mortgage loans extended by to 3 percent in January as
banks decreased 2.3 trillion market interest rates stayed
won in January after rising in at a low level in tandem with
the prior the BOK's monetary easing
stance. The central bank cut
its policy rate in July and
October last year. month.
11. The rate for market-type
financial products such as The rate for new corporate
certificate of deposit decreased loans inched up 3 basis points
11 basis points, with the one in January after falling 4 basis
for savings deposits falling 10 points in the previous month.
basis points.
12. Bank lending rates in South Korea rebounded
in January from a record low level as demand
for mortgage loans reduced amid the end of
temporary tax benefits for housing
transactions
Weighted average annual rate for new loans
extended by banks to households and
companies was 5 percent in January,
rebounding from an all-time low of 4.84
percent in the prior month, according to the
Bank of Korea (BOK).
