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The Bank of Korea raised the key interest rate again.

This time, I uploaded 0.5% points at once, which is twice the level I normally upload.

As a result, the base interest rate, which was 0.5% last year, has risen to 2.25% in one year amid the coronavirus.

It is the first time that interest rates have been raised by 0.5 percentage points at a time or raised three times in a row.

To that extent, this decision reflects the urgency of the authorities to keep up with the soaring inflation.

However, if interest rates rise, households as well as companies that borrow money will have to pay more for interest, and there are many concerns that the economy may sink as a result.

In addition, the real estate market, which has already seen a decrease in transactions, is expected to shrink further.

Today's (13th) news will take a closer look at the impact of interest rate hikes on our economy.



First of all, reporter Jeon Yeon-nam explains the background of the Bank of Korea making this decision.



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The reason the Bank of Korea raised the base interest rate by 0.5 percentage points at once was also due to inflation.



Consumer prices rose 6% last month, the highest in 23 years.



The sentiment that prices will rise in the future and expected inflation also soared to 4%, the highest in 10 years.



The Bank of Korea has decided that shock therapy is necessary at some point in order to break this inflationary trend.



So, with the unanimous consent of six meeting attendees, the rate of interest rate hike was doubled.



[Lee Chang-yong/Governor of the Bank of Korea: If each economic entity raises prices and wages, and as a result, prices rise again, we may face a situation where it is difficult to solve high inflation without a major recession.] The



US situation also had an impact. .



The U.S. central bank raised the benchmark interest rate by 0.75 percentage points last month, bringing the benchmark interest rates in Korea and the United States to a similar level.



There is more room for money to flow in a safe and profitable way.



In fact, the won-dollar exchange rate soared to 1,316 won, the highest since the foreign exchange crisis.



As the US predicted that it would raise interest rates again in two weeks, we also had to raise interest rates in advance to meet the level.



Lee Chang-yong, governor of the Bank of Korea, said that he would raise interest rates two or three more times by the end of the year.



A notice of a rate hike is unusual.



[Lee Chang-yong/Governor of the Bank of Korea: I think it is too natural for the market to predict the interest rate level of 2.75% or 3% by the end of the year.]



Governor Lee said that if inflation does not catch up with this increase, another big step could be taken. .



(Video editing: Choi Hye-young)