South Korea households, companies strong enough to handle a rise in borrowing costs: central bank
Reuters
Published Dec 13, 2017 09:14PM ET
South Korea households, companies strong enough to handle a rise in borrowing costs: central bank
SEOUL (Reuters) - The finances of most South Korean households and companies are strong enough to cope even if borrowing costs were to rise by 100 basis points, the central bank said on Thursday.
A 100 basis point rise in interest rates would increase local companies' debt burden by 14.2 percent per year, the Bank of Korea (BOK) said in its twice-yearly report on financial stability.
Even with the increased debt payment burden, the financial standing conditions of South Korean companies would be in "fair condition" the report said.
For middle-to-small-sized companies, a full percentage point rise in rates would increase the interest payment burden by 17.7 percent versus 14.8 percent for larger businesses.
A full percentage point rise in rates would not be a major burden on most households, the BOK said in the report.
Home loans and other debt owed by South Korean households jumped 9.5 percent in the third quarter from a year earlier, but that was the slowest debt growth since a 9.2 percent annual gain in the second quarter of 2015.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.