Synopsis
The Bank of Korea has increased the issuance of fresh banknotes for this year's Lunar New Year holiday, responding to heightened demand due to an extended holiday period. The central bank's recent data also shows a decline in loan rates as part of efforts to support the economy amidst fluctuating market conditions.Key Takeaways
- BOK increases fresh banknote issuance.
- 5.06 trillion won issued for Lunar New Year.
- Holiday extended to six days.
- Loan rates fell in December.
- Corporate loan rates decreased to 4.62%.
Seoul, Jan 24 (NationPress) The Bank of Korea (BOK) announced on Friday that it has released a larger amount of new banknotes for this year's Lunar New Year holiday compared to the previous year.
The central bank provided 5.06 trillion won (approximately US$3.89 billion) in fresh banknotes to banks and financial institutions over a span of 10 days leading up to Friday, marking an increase of 8.8 percent from the sum issued during the holiday season last year, as reported by the BOK and Yonhap news agency.
This rise in issuance is attributed to the holiday being extended to six days from the usual three, following the government's declaration of Monday as a temporary national holiday. The Lunar New Year this year is set for Wednesday.
During the festive period, the demand for fresh currency typically surges, as it is a tradition in South Korea for elders to give cash gifts to younger generations after receiving deep bows during the first greetings of the new year.
In other financial news, banks' loan rates experienced a decline in December, following a series of rate cuts by the central bank aimed at stimulating the economy, according to recent data released by the BOK.
The average interest rate for new loans issued by banks stood at 4.64 percent last month, representing a decrease of 0.12 percentage points from the previous month, as per the Bank of Korea's data.
Additionally, the lending rate for corporate loans fell by 0.14 percentage points to 4.62 percent in December.
The average lending rate for household loans also decreased by 0.07 percentage points to 4.72 percent, marking the first reduction in five months, amid stricter lending regulations aimed at controlling rising household debts and apartment prices.
Moreover, the interest rate banks offer for deposits declined by 0.14 percentage points to 3.21 percent.
Consequently, the gap between banks' lending and deposit rates widened to 1.43 percentage points last month, compared to 1.41 percentage points in November, according to the data.
In November, the BOK lowered its benchmark interest rate by 25 basis points to 3 percent, marking its first policy shift in over three years. During the December meeting, the central bank opted to maintain the rate steady, despite concerns regarding economic growth, in an effort to support the weakening local currency amidst significant volatility due to political instability.
