Current Issues Inquiry at the National Assembly's Political Affairs Committee Full Meeting on the 18th
Lee Bok-hyun, Governor of the Financial Supervisory Service, stated that "the effect of the base interest rate cut will be reflected in market loan interest rates within the first quarter of next year."
On the 18th, during the plenary session of the National Assembly's Political Affairs Committee, Governor Lee apologized for "the current situation where the public does not feel the interest rate cuts" and added, "within the first quarter, the effect of the interest rate cut will definitely be felt."
Kim Byung-hwan, Chairman of the Financial Services Commission, also explained that "since variable-rate loans adjust interest rates every 3 to 6 months, the Bank of Korea's base rate cuts will be reflected sequentially," and "although the pace of interest rate cuts for new household loans was slow, it is expected to accelerate following the second rate cut recently, thanks to cooperation requests from financial authorities."
These remarks came in response to Assemblyman Kang's criticism that "despite the Bank of Korea cutting the base rate twice consecutively, market interest rates remain high, reducing the public's consumption capacity."
The Bank of Korea lowered the base interest rate twice last year, and financial authorities are encouraging banks to promptly reflect these monetary policy changes in market loan interest rates. However, due to overlapping timing and policies on household debt management, the process is tense and resembles a tug-of-war.
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