SEOUL: South Korea’s household debt swelled to a record in the third quarter, prompting the government to release another set of measures to slow its rise.
Household debt including credit purchases rose to 1,295.8 trillion won ($1.1 trillion) as of end-September, an 11 percent jump from the previous year, a Bank of Korea statement showed on Thursday. The financial regulator said Thursday that it will seek stricter loan screening by banks on some type of mortgages and lending from so-called mutual finance institutions that had been loosely scrutinized, adding to measures announced in August.
The rise in debt comes as Donald Trump’s election and expectations that the Federal Reserve will increase interest rates next month push global yields higher, driving domestic rates higher and adding to some South Korean debtors’ repayment burden. As of end-June, about 60 percent of mortgages were floating-rate loans.
