April New Handling Amount COFIX Falls to 0.82%... Lowest Since August Last Year

[Asia Economy Reporter Park Sun-mi] The COFIX (Cost of Funds Index), which serves as the benchmark for variable-rate mortgage loans at commercial banks, has slightly declined.

On the 17th, the Korea Federation of Banks announced that the COFIX based on new transactions for April stood at 0.82%, down 0.02 percentage points from the previous month. This new transaction-based COFIX is the lowest since August last year (0.80%). Additionally, the outstanding balance-based COFIX was 1.04%, down 0.02 percentage points from the previous month, and the new outstanding balance-based COFIX recorded 0.81%, a decrease of 0.03 percentage points compared to the previous month.

COFIX refers to the weighted average interest rate of funds raised by eight domestic banks. It rises or falls reflecting increases or decreases in interest rates on deposit products such as actual deposits, savings, and bank bonds handled by banks.

The outstanding balance-based COFIX and new outstanding balance-based COFIX generally reflect market interest rate changes gradually, whereas the new transaction-based COFIX is calculated based on funds newly raised during the relevant month, making it more responsive to market interest rate fluctuations.

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