[Asia Economy Reporter Kwak Min-jae] Lee Chang-yong, Governor of the Bank of Korea, stated that there is a possibility of concluding the base interest rate hikes soon to ensure a soft landing of the real estate market.
On the 30th (local time), major foreign media outlets cited Governor Lee's interview, reporting that he hopes to finish raising the base interest rate around 3.5% per annum.
The governor said, "Although there are many uncertainties, if the situation proceeds as expected, the rate hikes (currently at 3.25%) could probably end around 3.5%," adding, "The Monetary Policy Committee will review the pace of monetary tightening and strive to achieve a soft landing of housing prices."
Governor Lee emphasized that domestic conditions such as inflation and economic growth take priority in monetary policy decisions, but the influence of the U.S. Federal Reserve (Fed) must also be considered.
He mentioned the risk of capital outflows, stating, "In a sense, if the gap between our interest rates and U.S. rates becomes too large, it may not be desirable."
He also forecasted that if China's economy ends its 'Zero COVID' policy next year and returns to normalcy, South Korea will gain significant economic opportunities. Governor Lee said, "If China eases its Zero COVID policy and reopens its borders and economy, it will be a huge economic stimulus for us," adding, "I hope that happens soon."
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