<Anchor> This
is a friendly economic time.
Today (10th) I will be with reporter Han Ji-yeon.
Hello, reporter.
(Hello.) Did the Bank of Korea hint that it could raise the base rate to 2.75% this year?
<Reporter>
Yes, the Bank of Korea said just three weeks ago that the year-end base interest rate would rise to a maximum of 2.5%.
Let's listen.
[Lee Chang-yong / Governor of the Bank of Korea (last month 26th): Of course, you said that the market forecasts the base rate of 2.25% and 2.5%, but I think it is a reasonable expectation to go up.]
[Park Jong-seok / Deputy Governor of the Bank of Korea (Yesterday): The market is seeing the year-end interest rate up to 2.75 four times, right?) The current base rate expectation is a reasonable expectation from our point of view.]
The current base rate is 1.75%.
To get to 2.75%, you have to go up 1 percentage point from now.
There are 4 remaining related meetings in July, August, October, and November.
The Bank of Korea said that it is appropriate to raise the baby step by 0.25 percentage points rather than the big step by raising 0.5 percentage points at a time. There is a calculation that you can raise it.
It is the first time in history that the six consecutive hikes have been made.
However, if this price rises further, the possibility of going to the Big Step remains open.
<Anchor>
In the end, the reason interest rates are raised like this is because of inflation.
However, looking at this week, the World Bank and the OECD lowered their global economic growth forecasts, suggesting that inflation could go not only this year but also next year and even the next year.
However, expected inflation is an indicator of future inflation rather than now, right?
<Reporter>
That's right.
Expected inflation refers to the expected rate of inflation in one year.
Expected inflation last month stood at 3.3%, the highest level in nine years and six months.
You may be wondering why we should worry about inflation that is not even the actual inflation rate, but it is because actions based on the idea that inflation will rise affect actual inflation.
For example, fear of rising prices causes workers to demand a wage increase from companies, which is reflected in the prices of goods and services, which can actually lead to a vicious cycle of rising prices.
<Anchor>
Another thing to point out is that in countries that are highly dependent on foreign trade like Korea, that is, countries that export and import a lot, the exchange rate inevitably affects prices.
But has there been any analysis related to how much influence this exchange rate has on prices?
<Reporter>
Of course, if the exchange rate rises by 100 won, it has the effect of buying a $1 item at a price of 100 won more.
As a result, domestic prices will rise.
It is analyzed that if the won-dollar exchange rate rises by 1%, the rate of inflation increases by 0.06 percentage points.
This is called the transfer rate of the exchange rate.
After the global financial crisis, it gradually decreased to zero level in 2020, then recovered again and rose to 0.06 in the first quarter of this year.
In the first quarter of this year, the exchange rate contributed about 9%, or 0.34 percentage points, out of the 3.8% increase in consumer price inflation.
The rate and speed of the exchange rate rise has accelerated considerably since the Ukraine crisis, and it once exceeded 1,290 won last month.
There are many forecasts that the US Fed will take a big step on the 14th, but there are concerns that this will further increase domestic inflation pressure as the dollar continues to strengthen.
<Anchor> Since
the base rate keeps rising like this, as we said in our friendly economy, a lot of money is flowing into short-term deposits, right now?
<Reporter>
Now, in a time when interest rates are rising so quickly, the friendly economy has informed me several times that short-term deposits should be taken as much as possible, that is, three or six months.
The base rate has been raised five times since August last year.
The amount of money poured into savings products in the financial sector, that is, regular deposits, has nearly tripled from 4 trillion won in the second half of last year to 13.7 trillion won in April this year.
In addition, the short-term portion of the total received products is 41.7% on average per month.
It has increased by 3 percentage points from the monthly average of 38.9% for three years since 2018.
The situation in Ukraine is still going on, and the situation outside is very uncertain.
In such a case, it is risky, so don't invest too quickly and hold on to it for a while until the situation is resolved.
Keep it as a deposit, but keep it for a short period as interest rates keep rising.