[2025 Audit] Rhee Changyong: "Cannot Signal End of Rate Cuts Based Solely on Real Estate"

Bank of Korea Governor Rhee Changyong made it clear that he cannot send a signal that the rate-cutting stance has ended based solely on the situation in the real estate market.

Yonhap News Agency

On October 20, during a National Assembly Strategy and Finance Committee audit held at the Bank of Korea headquarters in Jung-gu, Seoul, Governor Rhee responded to a question from Lee Soyoung, a lawmaker from the Democratic Party of Korea, who suggested that if there are limits to interest rate policy, the Bank of Korea should carefully reconsider its previously indicated rate-cutting stance.

Assemblywoman Lee stated, "Under the rate-cutting stance, the money supply has expanded significantly, but the Bank of Korea has assessed that this has not fully translated into increased consumption. Rather than leading to consumption or productive investment, a portion of the liquidity released by monetary easing appears to have flowed into the real estate market." She added, "If rate cuts are negatively affecting the real estate market and stimulating the exchange rate, these issues warrant a re-examination of the previously indicated rate-cutting stance."

In response, Governor Rhee said, "Lowering interest rates does have a definite effect on the real economy. However, it seems that a larger portion than the historical average is flowing into the real estate market this time." He further explained, "If this year's growth rate is 0.9%, that is significantly lower than the potential growth rate. We cannot make decisions or send signals based solely on the current real estate situation, disregarding the overall economy."