S. Korea's central bank to see household debt, housing price for timing of interest rate cuts

SEOUL, Sept. 11 (Xinhua) -- South Korea's central bank said on Thursday that it will see household debt and housing prices for the timing of further interest cuts.

The Bank of Korea (BOK) said in its latest biannual monetary policy report that, along with economic growth trends, the stability of household debt and the housing market will be significant factors to consider in determining the timing and extent of additional interest rate cuts in the future.

Additional measures would be necessary to alleviate downward pressure on the Asian economy, which had improved somewhat but faced growth below its potential growth rate, the BOK said.

Given the upward trend of housing prices in Seoul and the lingering expectations for further price increases, it will be necessary to determine the timing of further policy rate cuts while checking the effect of the recent house supply plans and the impact of monetary easing on expectations for housing prices, the central bank stressed.

Debt owed by households to deposit-taking banks totaled 1,168.3 trillion won (838.8 billion U.S. dollars) at the end of August, up 4.1 trillion won from a month earlier.

It continued to expand since February, swelling faster than an increase of 2.7 trillion won in July.

The domestic real estate market showed signs of recovery. The number of apartment transactions across the country was roughly on the increase with 45,000 in May, 53,000 in June and 34,000 in July.

The BOK cut its benchmark interest rate by 25 basis points in February and May each to 2.50 percent after lowering it by the same basis points in October and November last year. (1 won equals 0.00072 U.S. dollars) ■