Newly Handled COFIX Maintains 0.90% for Two Months... Only Balance-Based COFIX Declines

[Asia Economy Reporter Park Sun-mi] The Cost of Funds Index (COFIX), which serves as the basis for calculating variable interest rates on mortgage loans in the banking sector, remained at a level similar to the end of last year. The COFIX based on new funds raised showed no change, while the COFIX based on outstanding balance and new outstanding balance both declined.

According to the Korea Federation of Banks on the 15th, the COFIX based on new funds raised, which quickly reflects changes in market interest rates, stood at 0.90%, the same level as in November last year. The COFIX based on new funds raised has maintained the same level for two consecutive months after rising to 0.90% in November last year.

On the other hand, last month, the COFIX based on outstanding balance (as of the end of December) fell by 0.04 percentage points from the previous month to 1.17%. The COFIX based on new outstanding balance also recorded 0.93%, down 0.03 percentage points from the previous month.

COFIX is the weighted average interest rate of funds raised by eight domestic banks, reflecting increases or decreases in interest rates of deposit products such as savings and time deposits, and bank bonds actually handled by banks.

The COFIX based on outstanding balance and new outstanding balance generally reflects market interest rate changes gradually, whereas the COFIX based on new funds raised is calculated based on funds newly raised during the month, thus reflecting market interest rate changes relatively quickly.

This content was produced with the assistance of AI translation services.