Bank of Korea governor Lee Ju-yeol is speaking at an online press conference held after the Financial Monetary Committee on the 15th. Bank of Korea
Bank of Korea Governor Lee Ju-yeol expressed concerns over the overheating of the stock market. It was at a live internet press conference held immediately after the general meeting of the Bank of Korea Financial and Monetary Committee on the 15th.
Regarding the’bubble controversy’ following the recent surge in the KOSPI index, Governor Lee said, “It is not easy to judge how reasonable the degree of risk-taking tendency of investors is.” It is true that the speed is much faster than in the past.”
Controversy over’debt struggle’ over the KOSPI surge… Lee Joo-yeol “Watch closely”
He said, “If you speed, even a small shock can shake (the market),” he said. “I am always paying close attention to market unrest that occurs when stock prices are adjusted sharply. As for the shock that shook the market, they cited changes in monetary policy stances in major countries, the occurrence of unexpected geopolitical risks, and disruption in the supply of vaccines for the novel coronavirus infection (Corona 19).
On the 15th, a general meeting of the Financial Monetary Committee was held at the main building of the Bank of Korea in Jung-gu, Seoul. Bank of Korea
He also cautioned against the increasing’debt investments’ amid the high rise of the stock market. Governor Lee emphasized, “Investment expansion based on excessive leverage can lead to losses that are difficult for investors to bear due to price adjustments due to unexpected shocks.”
“It’s not enough to worry about our economic resilience”
It has evolved in relation to excessive controversy over the overheating of the asset market such as real estate and stocks and the increase in household debt. Governor Lee said, “There may be some adjustments in asset prices at the moment,” he said. “Even if there is an adjustment to the extent that can be expected, the overall resilience of Korea’s current financial system is not a concern.”
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In relation to household debt, which increased by 100 trillion won in banking household loans last year and reached 1700 trillion won in the third quarter of last year, he stressed that “the possibility of a significant increase in household debt insolvency is not high.” In the short term, interest rates are lower than before, and as the average maturity of loans is longer than before, the DSR (Total Debt Principal Repayment Ratio) is lower, and the delinquency rate is actually lower.”
Regarding the method of distributing disaster subsidies, which is currently in the midst of discussions centered on political circles, he said, “If you talk about personal opinions, I think selective support is more appropriate in the current situation.” This is because it is in the dimension of having to consider how efficiently limited resources will be used. “Applying to the difficult class, where the Corona 19 damage is concentrated, has a greater (support) effect, and as a result, the recovery speed of the economy can be accelerated.”
Freeze the standard interest rate by 0.5%… “The exit strategy is premature”
Korea-US standard interest rate trend. Graphic = Kim Hyun-seo [email protected]
When asked about the possibility of an exit strategy, a line was drawn as’prematurely’. Governor Lee said, “It is not a situation to consider at present to normalize various measures to respond to Corona 19 or to change interest rate policy.”
On this day, the KFTC decided to maintain the current standard rate of 0.5% per year. It is the fifth freeze decision since July of last year.
Although exports have recently shown a recovery trend, mainly in the IT sector, and the domestic economy is growing, it was judged that the uncertainty in the economic flow due to the re-proliferation of Corona 19 was greater. Governor Lee said, “We will maintain easing monetary policy until a stable recovery of the domestic economy is expected.”
Reporter Yoon Sang-eon [email protected]