S.Korea money supply growth, household lending up
SEOUL, Nov 11 - South Korea's money supply in September grew at the fastest pace in six months and banks' mortgage lending to households in October rebounded, data showed on Wednesday, adding pressure on the central bank to raise rates.
But the Bank of Korea is unlikely to increase its policy rate on Thursday amid persistent uncertainty over the global economy and a moderating property market boom, analysts said.
Reflecting the views, December treasury bond futures <.KTBc1> were barely changed after the data, up 3 ticks to 108.98 as of 0303 GMT.
"The data will not influence the Bank of Korea tomorrow. Given uncertainties over the global economy, such as the weak U.S. job market, and the government's stance on economic growth, it is hard for the BOK to raise rates within this year," said Kim Jae-eun, an economist at Hyundai Securities.
A Reuters poll showed the central bank looked almost certain to keep interest rates on hold on Thursday, but is widely expected to hike rates once or twice by the end of March. [ID:nSEO250236]
The L money supply rose a provisional 10.3 percent in September from a year earlier, the biggest gain since March and up from a revised 8.9 percent rise in August, the Bank of Korea said.
Analysts said the growth in September was boosted as financial markets were hit by a credit crunch a year ago and is seen accelerating further for some time on the base effect.
Banks' mortgage lending to households in October rebounded from a slight fall in September amid tight government loan control measures, separate central bank data showed.
Household mortgage loans rose by 1.4 trillion won in October from the previous month to 261.6 trillion won, compared with a 0.4 trillion won drop in September, the first decline in more than two years.
But the October increase was far smaller than last summer, when mortgage lending jumped 3 trillion won to 4 trillion won per month.
Overall lending to households gained by 1.4 trillion won in October from the prior month to 405.6 trillion won after falling 1.0 trillion won in September, the Bank of Korea said.
The government has stepped up loan regulations since July as record-low interest rates accelerated a property market boom.
The Bank of Korea has repeatedly expressed concerns about growing mortgage lending and the consequent rise in housing prices, and warned in September it would have to raise interest rates if the property boom heated up.
The BOK governor toned down his hawkish stance in October, prompting investors to scale back their bets on a rate hike as early as in November. (Reporting by Seo Eun-kyung and Cheon Jong-woo; Editing by Jonathan Hopfner)