<Anchor>



Korean financial authorities are deeply concerned by the news that the US could raise interest rates a lot again.

This is because, when the US interest rate rises, the exchange rate can jump along with it, and in particular, when the US interest rate rises higher than in Korea, foreign investors may withdraw money from the domestic market.



This part was pointed out by reporter Kim Jung-woo.



<Reporter> The



won-dollar exchange rate has been hovering above 1,300 won for nearly ten days.



This is because there is a high expectation that if the US central bank raises interest rates further to catch inflation, the value of the dollar will also rise.



When the exchange rate rises, the price of imported raw materials rises while international raw material prices rise, which in turn raises domestic prices.



There is also an analysis that if the international oil price and the exchange rate rise by 10% each, imports increase by 3.6%, increasing the trade deficit.



[Lee Chang-yong / Governor of the Bank of Korea: Energy imports account for about 18% of total imports, of which 11% is oil.

(Inflation) is more likely to fall gently and maintain a high inflation level for the time being rather than a rapid decline after the peak.]



I am also concerned about the 'interest rate inversion' phenomenon, where the US base rate is higher than ours.



Two weeks later, if the central bank of the United States raises interest rates by 0.75 percentage points, by 0.25 percentage points, and by 1 percentage point by 0.5 percentage points, U.S. interest rates become more expensive.



There have been three major interest rate inversions before, and in the recent two cases, foreign investors sold Korean stocks worth $26 billion and $8.3 billion, respectively, and left.



[Seong Tae-yoon/Professor, Department of Economics, Yonsei University: The fact that the value of the Korean currency may fall can play a role in lowering the value of the Korean asset market, so it can be a risk factor to the real economy situation through financial market instability.]



Yesterday ( 13) The Bank of Korea predicted that it would raise the key interest rate by only 0.25 percentage points this year unless it greatly deviated from expectations, but as the situation in the United States turned unexpectedly, the concerns deepened.



(Video coverage: Kim Gyun-jong, video editing: Jung Yong-hwa)



▶ US inflation has exceeded 9%...

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