Bank of Korea warns of developers’ debt risks as profits shrink
26/6/2024 6:23
Financial troubles at South Korean developers may worsen as they start to bear the brunt of a market slump that weighs on their earnings, the central bank said, issuing the latest warning over credit risks that continue to overshadow the economy.
The property sector has taken a hit since the Bank of Korea started its policy tightening 2021 to rein in an inflationary bubble stemming from pandemic-era stimulus. The BOK has kept policy rates at 3.5%, a level it deems restrictive, since January 2023. Elevated rates have made it harder for developers to borrow and repay debt, including limiting access to short-term loans known as project finance.
Source: Financial Times
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