Bank of Korea raised its benchmark rate 25 bps to 2.75% on the 15th. As South
Korea enters a rate-hike cycle, concern is growing that already-rising loan
rates could climb further. Banking-sector data on the 15th showed five-year
fixed mortgage rates at the five largest banks—KB Kookmin, Shinhan, Hana, Woori
and NH Nonghyup—ranged 4.74%–7.41%, with the top rate approaching 8%. The lower
bound has risen about 42 bps since late May. The data indicate market rates
moved up ahead of the central bank and that regulatory limits on loan volumes
are reducing banks’ incentives to keep lending rates low.
