This photo taken on July 6, shows apartment buildings in Seoul viewed from the Seoul Sky observatory. (Yonhap)
This photo taken on July 6, shows apartment buildings in Seoul viewed from the Seoul Sky observatory. (Yonhap)

South Korea's financial regulator said Friday it is ready, if necessary, to implement stronger curbs against soaring household debts as earlier measures have worked to rein in a steep increase in such loans this month.

The Financial Services Commission said the growth of household loans this month slowed on the back of a string of measures unveiled late last month aimed at curbing a sharp rise in household loans.

"We will closely monitor the trend of home-backed loan growth until it stabilizes and plan to swiftly implement additional measures (aimed at curbing loan growth), if necessary," it said.

Household loans had surged 6.2 trillion won ($4.5 billion) in June from the previous month, marking the largest monthly gain since August 2024.

In response, the government implemented stricter mortgage regulations, capping home-backed loans for home purchases in the capital region at 600 million won while suspending such loans for multi-home owners.

In the first 10 days of this month, outstanding household loans extended by five major lenders came to 755.7 trillion won, up 891.2 billion won from the end of June, translating to a daily increase of 89.1 billion won over the 10-day period in July, compared with a daily gain of 225.1 billion won in June.

Earlier this month, South Korea's central bank kept its benchmark interest rate unchanged at 2.5 percent, taking a cautious approach amid concerns about rapidly rising housing prices and growing household debts.

The move followed a rate cut in May, when the Bank of Korea lowered the policy rate by 25 basis points to support economic growth amid sluggish domestic demand and uncertainty stemming from the United States' sweeping tariff measures. (Yonhap)