BOK raises key interest rate again... “Catching rising prices is a priority.”

<Anchor>

The Bank of Korea raised the key interest rate again for the first time in three months.

Although prices have risen a lot now, the authorities explained that they decided to tighten the money line because it is likely to rise further in the future.

Let's take a look at the report of reporter Im Tae-woo first, then look at this more.

<Reporter>

The Monetary Policy Committee of the Bank of Korea raised the base rate by 0.25%p from 1.25% to 1.5% per annum.

Situational awareness was so common that the six meeting attendees made a unanimous decision.

The biggest reason is inflation, which has soared to the 4% range.

In the meantime, the BOK has predicted that the inflation rate will remain at 3.1% this year as inflation goes down after the summer.

However, he explained that he had tightened the money line as he judged that the price would rise more than expected due to the Ukraine crisis.

[Joo Sang-young / Acting Chairman of Monetary Policy Committee: I heard that there is a possibility that inflationary pressure may be prolonged than expected due to the Ukraine crisis.]

It seems that cooperation with the new government, which puts price stability as its top priority, was also considered.

[Seong Tae-yoon/Professor, Department of Economics, Yonsei University: I think that it is necessary to continuously raise the base interest rate because it is difficult to find additional growth engines in a state where price stability is not achieved and people's living expenses can deepen.] The

US situation is also a problem is.

The US is expected to raise the key interest rate by 0.5 percentage points in a row starting next month, which could lead to US interest rates higher than ours.

We raised our interest rate preemptively to the extent that foreign funds can escape by chasing the expensive dollar when interest rates are inverted.

However, as it is difficult to solve both inflation and the US with this increase alone, there are many expectations that the Bank of Korea will raise the base rate at least two or three more times within this year.

(Video Edit: Park Seon-sun)

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<Anchor> Here

is reporter Im Tae-woo, who just gave you the report.

[Reporter Im Tae-woo: Currently, household loans exceed 1,700 trillion won, and 70% of them are floating rate loans.

When the base interest rate rises, the interest on these loan products will also rise accordingly.

If this base rate rises by 0.25 percentage points, each household in debt will have to pay an additional 160,000 won a year, a total of 3.3 trillion won in interest.

However, this is an average, and the problem is that the burden that ordinary people actually bear is greater than that.]

[Reporter Im Tae-woo: This is because banks raise the interest rates on loans to the common people faster in order to manage their risks in an era when interest rates are just rising like these days.

In fact, the base rate has risen by 1%p in total four times over the past eight months, and the interest rate on home mortgage loans at banks has often risen by more than 2%p, double the rate during the same period.

It is a situation in which we cannot rest assured that we can only prepare as much as the base interest rate rises.]

[Reporter Im Tae-woo: Yes.

It is true that buying a house with debt has become burdensome, so there will be some impact.

For one, authorities continue to raise interest rates and continue to signal that borrowing and buying a house is becoming risky.

Candidate Chang-Yong Lee, who was appointed as the new governor of the Bank of Korea, is also worth noting here.

Candidate Lee said that now is the time to encourage debt management so that existing borrowers do not become more burdened with their debts.

Candidate Chang-Yong Lee is highly likely to participate directly from the next interest rate decision meeting, and it is worth paying attention to how much such thoughts will be reflected.]