South Korean Banks Keep Lending Rates at 4.06 Percent

(MENAFN) South Korean banks kept their lending rates unchanged in August, as the market continues to anticipate further cuts to the country's policy interest rate, data from the central bank revealed Tuesday.

The average lending rate for new bank loans remained steady at 4.06 percent in August, the same as the previous month, following eight consecutive months of declines, according to figures from the Bank of Korea (BOK).

The BOK has already reduced its benchmark interest rate twice this year—by 25 basis points each in February and May—bringing it to 2.50 percent, after similar reductions in October and November of 2022.

Despite these cuts, market expectations continue to point to more rate reductions later in the year.

For households, the rate on new loans dipped slightly by 0.03 percentage points, landing at 4.17 percent in August.

While mortgage rates for households held steady at 3.96 percent, rates for credit loans increased by 0.07 percentage points, reaching 5.41 percent.

Corporate loan rates also saw slight movement, with the average rate for new corporate loans decreasing by 0.01 percentage point to 4.03 percent in August.

Large corporations benefitted from a 0.01 percentage point drop in their borrowing rate, which fell to 3.98 percent, while smaller businesses saw their lending rates shrink by the same margin to 4.07 percent.

Additionally, the weighted average rate for new bank deposits edged down by 0.02 percentage points to an annualized 2.49 percent last month.

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