The Bank of Korea says the effects of recent rate increases could begin showing up in higher loan delinquency rates around next April or May. Its financial-stability report estimates that each 0.25 percentage-point rise in the base rate adds about 7 trillion won to combined household and corporate interest burdens.
The central bank also said the share of marginal companies unable to comfortably cover interest costs reached a record level at the end of last year. The warning puts renewed focus on vulnerable borrowers and firms as the effects of tighter monetary policy arrive with a lag.