Ministry will also reduce postal savings deposit rate by a similar amount
The Finance Ministry said Thursday it will cut the standard lending rate on loans from its Trust Fund Bureau to government-backed lenders to 2 percent from 2.1 percent, effective Wednesday.
The ministry also said it will reduce the Trust Fund Bureau's deposit rate on funds from the state-run postal savings and pension programs by the same margin, to 2 percent, also effective next Wednesday.
The rates apply to funds with contract periods of seven years or more. The ministry increased the rates by 0.1 percentage point to 2.1 percent in October after raising the rates to 2 percent from 1.9 percent in September in the first hike in five months.
The ministry's Trust Fund Bureau lends money from the postal savings and pension-program funds to government-affiliated organizations at the standard lending rate.
The decision to reduce the standard lending rate and the deposit rate followed the move to reduce the coupon rate of 10-year government bonds.
Housing loans follow
The Construction Ministry said Thursday that the base interest rate on housing loans charged by the public Housing Loan Corp. will be cut to 2.8 percent from the current 2.85 percent, retroactive to Oct. 30.
The cut follows a reduction in the standard lending rate of the Finance Ministry's Trust Fund Bureau to 2 percent from 2.1 percent.
The bureau channels money from postal savings and public pension premiums to government-affiliated lenders such as Housing Loan Corp.