Banks’ lending rates down in May amid monetary easing cycle

SEOUL, June 30 (Yonhap) -- Banks' loan rates fell for the sixth straight month in May, data showed Monday, as the central bank has been in a monetary easing cycle. The average lending rate of banks applied to new loans came to 4.17 percent last month, down 0.2 percentage point from a month earlier, according to the data from the Bank of Korea (BOK). The rate has been on a constant decline since December. The rate that banks pay for deposits also fell 0.08 percentage point to 2.63 percent, the eighth consecutive monthly decline. The spread on banks' lending and deposit rates, accordingly, increased to 1.54 percentage points in May from the previous month's 1.48 percentage points, the data showed. The BOK began its monetary easing cycle in October, marking its first policy shift since August 2021, and has cut its benchmark interest rate four times by a total of 1 percentage point through May in an effort to prop up economic growth amid sluggish domestic demand. The BOK is scheduled to hold its next rate-setting meeting July 10. This file photo taken April 2, 2025, shows a bank branch in Seoul. (Yonhap) graceoh@yna.co.kr(END)