Korean banks' deposit, lending rates hit record low in April

By Kim Soo-yeon
SEOUL, May 26 (Yonhap) -- South Korean banks' deposit and lending rates fell to
an all-time low in April due to effects of steep cuts in the key interest rate,
the central bank said Tuesday.

The average deposit rate for households and companies reached 2.88 percent last
month, down 0.09 percentage point from a month earlier, according to the Bank of
Korea (BOK). It marked the lowest level since January 1996, when the central bank
began to compile related data.
The average lending rate fell by 0.1 percentage point to 5.4 percent in April,
hitting an all-time low, the BOK added.
In May, the BOK froze the benchmark rate at a record low of 2 percent for the
third straight month, saying that a sharp decline in economic activities has
clearly eased. It had made six consecutive rate cuts totaling 3.25 percentage
points until February in a bid to bolster the slumping economy.
"A record-low key rate pulled down market rates like returns on certificates of
deposit. Local banks' deposit and lending rates have fallen in tandem," Kim
Joo-young, an official at the BOK said.
Meanwhile, South Korean banks' loan-deposit spread rebounded from an over
four-year low in April, it added.
The difference between local banks' lending and deposit rates reached 1.79
percentage points as of the end of April, compared with 1.73 percentage points
the previous month.
sooyeon@yna.co.kr
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