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[Friendly economy] What is the impact of the US interest rate freeze on my interest rate?

2019-12-12T01:37:18.626Z

With a friendly economy reporter Kwon Ari Thursday. Reporter Kwon, there was a US interest rate decision last year this morning and it came out as expected. Yes. The freezing rate of the US today was actually what the world expected, so there was no pounding tension.



<Anchor>

With a friendly economy reporter Kwon Ari Thursday. Reporter Kwon, at the dawn of today (12th), the U.S. last interest rate decision was made, and it came out as expected as it freezed?

<Reporter>

Yes. The freezing rate of the US today was actually what the world expected, so there was no pounding tension. But with the freeze today, I have a prospect of how the US will handle interest rates next year.

I want to see this because it has an impact on the interest and deposit savings we have to pay in the future. The US has cut interest rates three times this year.

And on the third, the end of October, I meant to keep this rate for the time being. And it was there early today, maintaining the benchmark rate between 1.5 and 1.75%.

Earlier, Korea decided to maintain the base rate, which was lowered in mid-October on the 29th of last month, so the interest rate difference between us and the United States is now lower, up by 0.5 percentage points.

As you can see, the gap is narrower than in the first half of this year, when we had the lowest interest rate gap with the US, but in this state, if we don't go down, we'll go down one more time.

But today, the Fed has said it will act appropriately to expand the economy, except that there is uncertainty about its prospects for next year.

None of the members who decided on interest rates predicted a rate cut next year. Rather, only four people came out.

<Anchor>

The United States then maintains that rate for the time being. At least not likely to get off. What does this mean for us?

<Reporter>

Yes. This is why it's important to us because it's an environment where we have to be very careful in making decisions to lower the base rate.

When the world's money moves, one of the many things that move and see it's important, of course, is interest rates.

And we are still burdened with lower interest rates than the US under ordinary circumstances. If I have money I can invest anywhere. The United States is a bigger and more stable economy, but it also pays more interest.

Then where do I want to put my money, weighing America and Korea? It will increase your chances of not choosing us. We need to do that now, which keeps interest rates lower than the US.

Also, because Korea has grown into a very attractive economy, just because interest rates are lower than the United States does not mean that money will run out.

But if the United States continues to hold or really raise this rate next year, we're going to have to "lower interest rates" and "let people spend and invest at low interest rates" to solve the current recession. To make an active choice is obviously a burdensome situation.

<Anchor>

Even if interest rates are still low, it is unlikely that they will be lower in the future. Are you talking about this?

<Reporter>

It's a difficult problem, but there are many predictions that our interest rate will fall once again in the first half of next year.

But if you look at the situation this year, we cut the benchmark rate twice in July and October. When it fell for the second time in October, it returned to its all-time low.

But in July, this was reflected in the market, and the interest rate for household loans in September was the lowest ever.
Since the interest rate was lowered in October, the loan rate on the market has increased metallurgy metallurgy. Instead of following the base rate, they moved in reverse.

In a nutshell, banks also have their own costs to loan us.

If the interest rate rises, the banks' costs will increase because it has been raised for a while due to many factors.

Now that the costs are falling again, lending rates are falling, but they haven't reached the level at the time of October's cut.

The reason is that if interest rates fall, my interest rate, loan interest rates are likely to fall, and my principal burden is so low, we have not seen it in the second half of this year, and there are circumstances that may not be so. .

In fact, the Bank of Korea, which is lowering interest rates, repeatedly says, "It is very difficult to raise the economy with interest rates."

Low interest rates are clear, but our interest may not be noticeably easier to fall. I decided to spend a lot of money to boost the economy, especially next year.

That won't work in any way to lower market interest rates, so it's worth thinking about those who are borrowing money today, looking at the US interest rate freeze and the outlook.

Source: sbskr

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