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Bank of Korea Governor Lee Ju-yeol warned on the 15th that “investment based on excessive borrowings such as’debt investment (investment in debt)’ can lead to unbearable losses.”
Governor Lee said at a press conference after the Financial Monetary Commission decided to freeze the standard interest rate of 0.5% per year. Said this. “A small shock, for example, if a major country’s monetary policy changes or an unpredictable geopolitical risk arises, or if the rate of re-proliferation of Corona 19 is faster than expected, the stock price could be adjusted.”
However, it dismissed the so-called’exit strategy’, which is a measure to recover liquidity in the market, which is deeply related to a surge in asset prices. Governor Lee said, “There is no plan to quickly take up liquidity support measures as difficulties such as temporary and daily jobs for small business owners and self-employed continue.”
He explained, “The domestic economy is showing a gradual recovery, but the uncertainty of the growth path is high,” he explained. Governor Lee diagnosed that “the possibility of insolvent household debt is not high.”
Lee Ju-yeol “The stock price can be adjusted even with a small impact”
Bank of Korea governor Joo-yeol Lee (pictured) said at an annual press conference immediately after the standard interest rate was frozen on the 15th, “the stock price may be adjusted.” He said the word’asset price (stock price) adjustment’ six times at a conference on that day. The stock market showing a steep uptrend and the attention of individual investors rushing to it were exposed.
Governor Lee analyzed the recent share price rise as “the result of the conclusion of the US economic stimulus plan and the supply of the Corona 19 vaccine faster than expected, which led to an increase in investors’ preference for risky assets.” . However, he said, “It is difficult to determine whether investors’ risk-taking tendencies are valid and there is evidence,” he said. “It is not easy to judge whether the economy will improve as expected by investors.” He added, “I am watching while paying attention to the possibility of a sharp adjustment in the stock price.”
Regarding the growing household debt, he said, “It is not very likely that household debt insolvency will increase significantly at this time, such as a lower rate of delinquency for household loans at banks.” They replied that selective support was desirable for the 4th emergency disaster support fund, which was discussed in the political world.
It also revealed its intention to continue a easing monetary policy for those affected by Corona 19. Governor Lee said, “It is too early to mention the shift in monetary policy.”
Reporter Kim Ik-hwan [email protected]
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