The Bank of Korea “Keep Monetary Policy Ease in Next Year”

【Anchorment】
The Bank of Korea has announced that it will maintain its monetary policy easing trend next year.

However, he emphasized that it will implement monetary policy by paying more attention to the risk of financial imbalances, such as household debt and overheating in real estate and stock markets, which have been increasing rapidly since lowering the benchmark interest rate to a record low.

This is reporter Kim Jong-min.

【 reporter 】
【Interview】 Joo-Yul Lee / President of the Bank of Korea (Conference on Monetary Policy Directions on November 24)
“Today, the Financial Monetary Commission decided to keep the Bank of Korea’s standard interest rate at the current 0.50%. Today, the decision of the FSC to maintain the Bank of Korea’s standard interest rate at the current level was’All Unity’.”

The Bank of Korea’s last regular meeting of the Financial and Monetary Committee held this year last month also froze the base rate, and the base rate, the lowest level ever, has continued for more than half a year.

It was a measure to respond to the economic downturn caused by the Corona 19 outbreak, but the effect was clear.

First of all, the Bank of Korea’s judgment is that it had a positive effect on gross domestic product (GDP) and consumer prices.

It is also believed that the effect spread smoothly to the financial market.

【Interview】 Lee Sang-hyung / Director of Monetary Policy, Bank of Korea
“The market interest rate and the loan interest rate have fallen considerably due to the cut in the base rate, and in the case of the corporate sector, the financing conditions have improved and the interest repayment burden has eased, and the household sector also has eased the interest repayment burden, mainly among the low-income class…”

The problem is counterproductive.

As the interest repayment burden decreased, loans for various investment funds increased, and asset markets such as real estate and stocks were overheated.

【Interview】 Min Jwa-hong / Director of Financial Stability Bureau, Bank of Korea
“In the process of responding to Corona 19, financial imbalances are intensifying, such as a sharp increase in household and corporate debt and intensifying pressure to increase asset prices.

In this situation, the Bank of Korea announced the’Monetary Credit Policy Operation Direction’ next year.

【Standing】
Unless the Corona 19 crisis subsides, the Bank of Korea’s easing monetary policy is expected to continue.

【 reporter 】
It is to support the recovery of growth and stabilize the inflation rate at the target level by maintaining the easing trend.

Instead, he emphasized that he would respond by examining and analyzing various aspects of the flow of funds to the asset market, the risk of insolvency of household and corporate loans, and the soundness of financial institutions.

In addition, he added that he will find ways to strengthen support for new growth sectors and employment expansion companies that can contribute to expanding the growth engine of the Korean economy, taking into account changes in conditions after Corona 19.

This is TBS Kim Jong-min.

#Bank of Korea #Monetary credit policy #Financial and monetary committee #Base rate

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