The drop follows two base rate reductions by the central bank in July and October that sent the key rate to 1.25 percent, matching the all-time low that had been seen once in 2016.

The lending rate on fresh household loans inched down 0.01 percentage point to 3.01 percent in October, but the average rate on fresh corporate loans dipped 11 basis points to 3.2 percent.

Both household and corporate loans have been rising at a slowing pace in recent months, with overall household borrowing climbing 3.9 percent from a year earlier to 1,572 trillion won ($1.33 trillion) as of end-September, the slowest on-year growth since the second quarter of 2004.

Meanwhile, the interest rate paid by banks on fresh deposits slipped only 0.2 percentage point to 1.55 percent in October, narrowing the gap between the rates charged and paid by banks to 1.65 percentage points from 1.74 percentage points the previous month. (Yonhap)