Korea Business News Agency - NSP NEWS AGENCY.

(Seoul=NSP NEWS AGENCY) = Last month, both corporate and household loan interest rates dropped, resulting in a 0.12%p decrease in loan rates to 5.14%. This marks a turnaround in the loan rates, which had been on the decline for the first time in four months since August last year, influenced by the decrease in the 5-year bank bond rate, a long-term benchmark rate.

According to the 'December 2023 Weighted Average Interest Rates of Financial Institutions' announced by the Bank of Korea on the 31st, the savings deposit interest rate, based on the amount of new deposits in December, fell by 0.14%p to an annual 3.85% compared to the previous month. The loan interest rate also decreased by 0.12%p to an annual 5.14%.

The corporate loan interest rate dropped to 5.25%, down by 0.01%p from the previous month, while the small and medium-sized enterprise (SME) loan interest rate decreased by 0.11%p to 5.31%. The corporate loan interest rate experienced a turnaround, declining for the first time in four months since August (5.21%).

Household loan interest rates also decreased by 0.22%p to 4.82% compared to the previous month. This marks a reversal in the household loan interest rates, which had been on the decline for the first time in five months since July (4.80%). Housing collateral loan rates, on the other hand, recorded a decrease for two consecutive month since October last year, reaching 4.16%.

The head of the Bank of Korea's financial statistics team explained,"Despite the rise in the COFIX and the increase in the interest rate on special exemption deposits, the decline in the 5-year bank bond rate, a long-term benchmark rate, had an impact, resulting in a decrease in housing collateral loan rates."

By Eun-young Huh(eunyoung114@nspna.com) and Soo-in Kang(sink606@nspna.com)

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