U.S. Stock Index Futures Steady After S&P 500 Hits Record on Strong Economic Data 
Oil Prices Ease in Asia as Geopolitical Risks Clash With Weak Demand Outlook 
Wall Street Ends Higher as S&P 500, Nasdaq Extend Gains Ahead of Holiday Week 
Platinum Price Surges Past $2,000 as Demand and Supply Dynamics Tighten 
China Keeps Benchmark Lending Rates Steady as Economic Outlook Remains Cautious 
BOJ Minutes Reveal Growing Debate Over Interest Rate Hikes and Inflation Risks 
Asian Stock Markets Trade Flat as Holiday Liquidity Thins and BOJ Minutes Watched 
South Korea Central Bank Warns of Rising Financial Stability Risks Amid Won Volatility 
German Exports to the U.S. Decline Sharply as Tariffs Reshape Trade in 2025 
Asian Stocks Rise as Wall Street Tech Rally Lifts Markets, Yen Slumps Despite BOJ Rate Hike 
IMF Reaches Staff-Level Agreement With Egypt, Opening Path to $3.8 Billion in Funding 
Japan Revises Economic Growth Forecast as Stimulus Fuels Consumption and Investment 
Why U.S. Coffee Prices Are Staying High Despite Trump’s Tariff Rollbacks 
Gold Price Breaks $4,500 as Safe-Haven Demand and Rate Cut Bets Fuel Rally 
BOJ Governor Signals Gradual Rate Hikes as Japan’s Inflation Nears 2% Target 
China’s Power Market Revamp Fuels Global Boom in Energy Storage Batteries 
South Korea’s household debt surged last quarter, reaching 1,896 trillion won, as mortgage loans soared by 5.9%. This increase is likely to deter the Bank of Korea from considering an interest rate cut when it meets on August 22, amid concerns over financial imbalances and rising home prices.
South Korea’s Accelerating Household Debt Likely to Keep Bank of Korea’s Rate Hike On Hold
The central bank is anticipated to refrain from indicating a near-term policy shift when authorities convene later this week, as the most recent dataset in a series of datasets shows that South Korea's household debt expanded at an accelerated pace last quarter.
The Bank of Korea announced on August 20 that total household credit increased by 1.9% from the previous year to 1,896 trillion won ($1.43 trillion) in April-June. Mortgage loans, the primary source of credit, increased by 5.9% in the prior year, reaching 1,093 trillion won.
In conjunction with an earlier BOK survey that indicated that consumers anticipate a further increase in the housing market's temperature, credit data on August 20 is expected to reinforce the consensus among economists that monetary authorities will maintain the benchmark interest rate at 3.5%, a level that is considered restrictive, when they meet on August 22.
Rising Household Debt and Seoul’s Housing Prices Fuel BOK’s Concerns Over Financial Imbalances
Last month, BOK Governor Rhee Chang-yong expressed apprehension regarding the rise in household debt, exacerbated by the continuous increase in home prices in Seoul, thereby increasing the likelihood of financial imbalances. Numerous individuals maintain most of their wealth in real estate, resulting in South Korea's household debt-to-economy ratio being among the highest in the world.
Although many economists anticipate the BOK reducing its rate in October, this prediction may be postponed if the housing market continues to exhibit warming symptoms beyond August. According to Yahoo Finance, this uncertainty and an export rally driven by artificial intelligence processors bolster policymakers' confidence in the economy's ability to continue operating despite restrictive policy settings.
On a separate note, the Financial Services Commission of South Korea announced on August 20 that the mortgage loan limit for residences in the greater Seoul area will be reduced beginning September 1. With its potential to discourage private lending, this action underscores the gravity of the situation and the caution that needs to be exercised in the future of private lending.
