SEOUL: Bank deposit rates in South Korea rose for the first time in 10 months on expectations that the U.S. Federal Reserve may raise its policy rate in December, central bank data showed Thursday.
Rate on new time deposit stood at an annualized rate of 1.56 percent in October, up 0.05 percentage points from a month earlier, according to the Bank of Korea (BOK). It was the first increase since December last year.
Periodical deposit rate gained 0.01 percentage point from a month earlier to 1.81 percent in October, marking the first rise in 19 months.
Bank lending rate to companies inched up 0.01 percentage point to 3.57 percent, with the rate on lending to big corporations advancing 0.06 percentage points to 3.35 percent.
The deposit and lending rates rise came amid the expected policy rate hike in the United States in December.
The BOK lowered its benchmark interest rate by a quarter percentage point in August and October last year each, before cutting it further in March and June each to an all-time low of 1.5 percent.
The central bank is widely expected not to cut the policy rate further due to expectations for the Fed’s rate hike in December or early next year.
Rate for mortgage loans kept a downward trend, declining 0.02 percentage points from a month earlier to 2.90 percent in October. Household loans rate dipped 0.05 percentage points to 3.06 percent.
