Gwangju Dong-gu's 1.8% Interest Rate Lowest in the Country? "Calculation Methods Differ"

Council Member Hyunjung Park: "About 1.5 Billion Won Loss in Interest Income"
District: "Interest Rate Rises to 3.3% When Including Settlement-Based Public Deposit Interest"

Exterior view of Gwangju Dong-gu Office.

There have been claims that Gwangju Dong-gu is incurring losses in interest income due to having the lowest treasury interest rate among the five local governments in the region, and that its fiscal soundness needs to be strengthened.

According to data from the Ministry of the Interior and Safety on September 3, as of last year, Gwangju Dong-gu’s treasury interest rate was 1.89%, with an average balance of 157.5 billion won and interest income of 2.979 billion won. Dong-gu’s treasury interest rate is the lowest among Gwangju’s local governments, falling short of both the national local government average of 2.87% and the base interest rate of 2.5%. It is estimated that Dong-gu is losing approximately 1.5 billion won in interest income compared to the average interest rate.

Hyunjung Park, a Gwangju Dong-gu Council Member, pointed out, “The district must provide a specific and transparent explanation regarding the issue that such losses are occurring in finances that should be used for residents,” adding, “Currently, the agreement for handling treasury work is not disclosed according to the Act on Disclosure of Information by Public Agencies, but related laws and systems should be improved to make it public and thereby strengthen the fiscal soundness of local governments.”

In response, the district explained that the 1.89% treasury interest rate is based on the bank’s average balance, and that, as with other local governments, if the average amount of cash-equivalent assets and short-term financial products at the time of settlement is considered and public deposit interest is added, the rate increases to 3.3%.

A district official stated, “To accurately determine the actual deposit yield of a local government, the average bank balance over a certain period must be the standard. Therefore, to calculate the interest yield more precisely, we submitted the total public deposit interest based on the average bank balance,” adding, “We plan to submit revised data to the Ministry of the Interior and Safety and Gwangju City.”