SEOUL, Feb 21 (Reuters) - South Korea’s household credit grew at its fastest pace in over a decade in the fourth quarter of 2016 as borrowers continued to take advantage of record-low interest rates, central bank data showed on Tuesday.
Household debt, including loans and other debt owed by South Korean households, soared 11.7 percent in the October to December period from a year earlier, to 1,344.3 trillion won ($1.17 trillion), up from a revised 11.3 percent growth in the third quarter, preliminary data from the Bank of Korea showed.
Household borrowing in the fourth quarter was the fastest since a record 11.8 percent jump in the fourth quarter of 2006.
Credit growth in the fourth quarter was led by housing mortgage loans at both bank and non-bank financial institutions, the data showed - extending a trend of swiftly rising household debt seen since the BOK started easing policy since mid-2012.
A breakdown of the data showed household loans in the fourth quarter rose 11.7 percent on-year to 1,271.6 trillion won, ticking up from 11.6 percent in the third quarter when it stood at 1,228.7 trillion won.
The outstanding amount of purchases on credit, meanwhile, rose 11.6 percent in the December quarter over a year ago, accelerating from 7.0 percent expansion in the previous quarter on growth of financial businesses like credit card companies, the BOK said.
The central bank’s benchmark policy rate is currently at a record low of 1.25 percent. The BOK will next review policy on Thursday, with a majority of analysts predicting the bank to stand pat in the face of global uncertainties and rising household debt. ($1 = 1,148.0000 won) (Reporting by Christine Kim; Editing by Shri Navaratnam)