<Anchor> The

financial authorities raised the base interest rate again. The base interest rate, which fell to the 0% range last year amid the coronavirus, has risen to the 1% level again for the first time in 1 year and 8 months. Those who borrowed from the bank have a higher interest burden, but this is not the end, and it is likely to rise further in the first half of next year.

This is the first news reporter Jang Hoon-kyung.

<Reporter> As the

background of the end of the era of ultra-low interest rates in the 0% range, the Bank of Korea heard that the domestic economy is recovering well and steep inflation.

In addition to the rise in the price of raw materials such as international oil prices, consumption demand is increasing due to daily recovery and the disruption of the global supply chain is prolonged, the BOK said.

The consumer price inflation forecast is also 2.3% this year and 2% next year, highlighting the need to raise interest rates by 0.2%p and 0.5%p, respectively, from the forecast just three months ago.

The Bank of Korea did not deny the prospect of further hikes in the first half of next year, even after raising the interest rate by 0.5%p twice since August.

[Lee Joo-yeol / Governor of the Bank of Korea: I can say that (base rate) is still at an accommodative level in light of inflation. We do not think it is necessary to rule out the increase in the first quarter.]

The interest burden for those with large loans is bound to increase.

Even during the same period of rising interest rates, households in major countries reduced their debts by repaying their principal, while Korea's household debt continued to record highs.

The Bank of Korea predicted that the annual interest burden of households would increase by 5.8 trillion won compared to the end of last year due to successive interest rate hikes.

[Kim Sang-bong/Professor of Economics at Hansung University: I think it would be better to pay the minimum (loan).


In the midst of this, some banks have announced an increase in interest rates for deposits and savings accounts, conscious of the financial authorities' unfavorable views on the difference in interest rates between deposits and deposits.

(Video Edit: Seung-Yeol Lee) 

▶ Ownership tax and interest burden…

Waiting on the decline in buying