Household debt tops W1,400tr in July: lawmaker

South Korea's household debt jumped 9 percent in July from a year earlier, a lawmaker said Tuesday, despite the government's tightened lending rules.

The country's overall household debt came to 1,439 trillion won ($1.27 trillion) as of end-July, said Chae Yi-bai, a lawmaker of the opposition People's Party, citing the Korea Credit Information Services, the public agency responsible for managing the country's credit information.
 

He said household loans extended by credit card firms and other non-banking companies rose sharply, worsening the quality of household debt.

The loans extended by the secondary financial firms could pose challenges in case of a rate hike as the secondary financial firms demand higher interest rates than those of banks.

In August, the Bank of Korea kept its policy rate at an all-time low of 1.25 percent, though it has said that it may take a monetary tightening stance if the economy shows signs of a robust recovery, a comment widely seen as signaling a rate hike by the central bank over the long haul. (Yonhap)