The Bank of Korea released preliminary data showing that household credit in the second quarter of 2026 jumped by 24.9 trillion won, or 17.7 billion dollars, the largest increase since the third quarter of 2021 and almost double the revised 13.4 trillion won rise in the first quarter. Total household credit, which includes outstanding credit card balances, rose by 25.9 trillion won to a record high of 2,019.8 trillion won. Housing loans increased by 12.2 trillion won, while other loans including unsecured credit surged by 12.8 trillion won, more than double the 5.4 trillion won increase in the first quarter. The data may support further tightening measures by the Bank of Korea at its monetary policy meeting on August 27, after it raised interest rates by 0.25 percentage point to 2.75 percent in July, its first hike in more than three years.
Surge in household credit may prompt BOK to hike rates, raising the policy rate.
