S. Korea's MBS issuance logs double-digit fall in H1

South Korea's issuance of mortgage-backed securities (MBS) logged a double-digit fall in the first half of this year due to weaker demand for home-backed loans amid the interest rate hikes, financial watchdog data showed Wednesday.

The sale of the MBS, issued by the state-run Korea Housing Finance Corp. to securitize home-backed loans, stood at 11.9 trillion won (9.1 billion U.S. dollars) for the first six months of 2022, down 48.1 percent from a year earlier, according to Financial Supervisory Service.

The double-digit reduction came from lower mortgage demand, caused by higher borrowing costs.

The country's central bank raised its policy rate by 50 basis points to 2.25 percent in July, delivering three back-to-back rate hikes for the first time this year with 25-basis-point hikes in April and May.

The issuance of asset-backed securities (ABS), including the MBS, came to 24.1 trillion won (18.3 billion U.S. dollars) in the first half, down 32.0 percent from a year earlier.

The ABS issuance by financial companies added 1.7 percent to 7.9 trillion won (6 billion U.S dollars), while the ABS sale by industrial companies declined 10.3 percent to 4.3 trillion won (3.3 billion U.S. dollars).