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Banks’ lending rate down for 2nd month in July

August 30, 2024

Banks’ loan rate declined for a second consecutive month in July, as the central bank has frozen its key rate for more than a year amid still-high inflation, central bank data showed Friday.

The average lending rate of banks applied to new loans last month came to 4.55 percent, down from the previous month’s 4.71 percent, according to the data from the Bank of Korea (BOK).

Early this month, the central bank kept its key rate frozen at 3.5 percent for the 13th straight time.

Banks’ lending rate on household loans came to 4.06 percent on average in July, down 0.2 percentage point from a month earlier, according to the BOK.

Their lending rate for corporate loans also slid 0.1 percentage point to 4.78 percent over the cited period, it added.

The rate banks pay for deposits reached 3.41 percent in July, down 0.1 percentage point from the previous month.

The spread on banks’ lending and deposit rates widened to 1.14 percentage points last month from 1.2 percentage points in June, according to the data.

This file photo, taken July 18, 2023, shows information on a bank's loan programs at a lender in Seoul. (Yonhap)
This file photo, taken July 18, 2023, shows information on a bank’s loan programs at a lender in Seoul. (Yonhap)