SEOUL (Reuters) – South Korea’s household credit shrank at a record pace in the first quarter as high interest rates suppressed demand, central bank data showed on Tuesday.
The country’s total household credit stood at 1,853.9 trillion won ($1.40 trillion) at the end of March, down 0.7% from December and down 0.5% from a year earlier, according to the Bank of Korea.
It was the biggest quarterly drop in the data series that started in the last quarter of 2002, faster than the 0.2% loss in the previous quarter and the previous record of 0.4% in the first quarter of 2009. Its annual fall was the first ever.
South Korea’s central bank was on a tightening campaign for a full year through January, raising interest rates to the highest level in 14 years. It has paused since then.
($1 = 1,320.9300 won)
(Reporting by Jihoon Lee; Editing by Sonali Paul)