South Korea’s Household Bank Loans Rise to 466.5 Trillion Won

South Korea’s bank lending to households rose the most in six years in December as demand increased before tax incentives to encourage home purchases expired at the end of the year.

Loans to households increased by 4.9 trillion won ($4.6 billion) last month to 466.5 trillion won, the biggest gain since December 2006, the Bank of Korea said in an e-mailed statement today. Mortgage lending expanded by 5 trillion won to 316.9 trillion won and loans to companies fell 11.8 trillion won to 589 trillion won.

The central bank will keep interest rates unchanged at 2.75 percent tomorrow after two cuts last year, 13 out of 14 economists predict in a Bloomberg survey. One economist projects a cut to 2.5 percent.

The broadest measure of money supply, M2, rose 0.2 percent in November from the previous month, according to a separate central bank statement.

To contact the reporter on this story: Eunkyung Seo in Seoul at eseo3@bloomberg.net

To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net

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