Households' excess funds fall in Q1 amid pandemic

Excess funds held by South Korean households and nonprofit agencies fell in the first quarter from a year earlier as banks tightened lending rules, the central bank said Thursday.

Net financial funds -- the value of financial assets minus financial liabilities -- held by local households and nonprofit organizations serving households amounted to 44 trillion won ($38.5 billion) in the first quarter, down from 65.9 trillion won a year earlier, according to preliminary data from the Bank of Korea (BOK).

Excess funds refer to the volume of money that remains on the balance sheets of households after people manage available funds via deposits, stock investments and other means.

Their excess funds grew last year on the back of increased liquidity meant to support the economy hit by the coronavirus pandemic.

Local companies' new borrowing narrowed in the first quarter from a year earlier as their sales rose amid the pandemic, the BOK said.

Net borrowing of non-financial enterprises came to 22.5 trillion won in the first quarter, compared with 28.6 trillion won a year earlier, according to the BOK. (Yonhap)