Cash surplus held by South Korean households dropped in the second quarter as the households spent money to purchase home amid record-low interest rates, central bank data showed on Wednesday.

Cash surplus among households and non-profit organizations reached 13.7 trillion won (12.5 billion U.S. dollars) in the April-June period, down 43.6 percent from the previous three-month period, according to the Bank of Korea (BOK).

The cash surplus means a net cash holding, which is based on cash investment into deposits, insurance and stocks minus borrowed money. The case investment amounted to 50.3 trillion won, with the borrowed money among households reaching 36.6 trillion won.

The second-quarter drop in cash surplus indicated households borrowed money to purchase home rather than investing money into securities or deposits.

The country's household debts kept a record-breaking trend amid lowered borrowing costs. The BOK cut its benchmark interest rate by 25 basis points in June to an all-time low of 1.25 percent, while the government eased regulations on mortgage financing.

Debts owed by households and non-profit organizations to financial institutions reached 1,479.3 trillion won (1.35 trillion U.S. dollars) as of end-June, up 2.5 percent from three months earlier.

Source : XINHUA