May New CoFIX 1.98%... 0.14%p Increase from Previous Month

Continued Upward Trend for 4 Consecutive Months

[Image source=Yonhap News]

[Asia Economy Reporter Yu Je-hoon] In May, the COFIX (Cost of Funds Index) based on new transaction amounts continued its upward trend, reaching 1.98%.

According to the Korea Federation of Banks on the 15th, the COFIX based on new transaction amounts last month rose by 0.14 percentage points from the previous month to 1.98%. The COFIX based on outstanding balances increased by 0.10 percentage points to 1.68%, and the new outstanding balance-based COFIX rose by 0.09 percentage points to 1.31%.

Commercial banks will reflect the COFIX rate level announced on that day for last month’s COFIX in the variable interest rates of new mortgage loans starting from the 16th.

COFIX is the weighted average interest rate of funds raised by eight domestic banks (KB Kookmin, Shinhan, Hana, Woori, Nonghyup, Industrial Bank of Korea, SC First, and Korea Citibank). It reflects changes in interest rates of deposit products such as actual deposits, savings, and bank bonds handled by banks, causing it to rise or fall accordingly.

For the outstanding balance-based and new outstanding balance-based COFIX, market interest rate changes are generally reflected gradually. However, the COFIX based on new transaction amounts is calculated based on funds newly raised in the current month, so market interest rate changes are reflected relatively quickly.

Meanwhile, the short-term COFIX announced over the past four weeks was surveyed to be between 1.80% and 1.97%. The short-term COFIX is calculated based on short-term funds with a contract maturity of three months.

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