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20:56, 27-Sep-2017
Cash holdings of S. Korean households fall amid home-buying rush
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Cash and cash equivalent held by South Korean households tumbled in the April-June period amid a rush to purchase homes with borrowed money, central bank data showed Wednesday.
The amount of a so-called "net fund management" stood at 10.5 trillion won (9.2 billion US dollars) in the second quarter, down 3.6 trillion won from the one before, according to the Bank of Korea (BOK).
The net fund management refers to cash investment, including deposits, insurance and stock investment equivalent to cash, minus borrowed money. It means a surplus money held by households and non-profit organizations.
Cash holdings have fallen two straight quarters as households rushed to buy new properties with borrowed money.
The new government under President Moon Jae-in, which was inaugurated in May, unveiled a series of measures to control speculative investment into the real estate market.
According to the Ministry of Land, Infrastructure and Transport data, the number of housing transactions across the country jumped from 199,000 in the first quarter to 259,000 in the next quarter.
The BOK was forecast to lift its benchmark interest rate later this year as its policy rate of 1.25 percent neared the range of 1.00-1.25 percent set by the US Federal Reserve as its benchmark rate.
It would increase debt-servicing burden for South Korean households, which already struggle to pay debts amid the tightened standard.
Source(s): Xinhua News Agency