Despite concerns that the economy could be more subdued than it is now, the reason why interest rates were raised again is because of prices that are not being caught.
The Bank of Korea said it was still too early to discuss whether or not to lower the base rate.
Then, when interest rates will drop, reporter Nam Jung-min will tell you.
A restaurant in Seoul during lunchtime.
As the skyrocketing lunch prices make people afraid of opening their wallets, customers are flocking to relatively inexpensive snack bars or restaurants known for their cost-effectiveness.
[University student: No matter how expensive it was, it was about 10,000 won, but these days it seems to be 15,000 won, and it has become more expensive.]
Last year, consumer prices rose by 5.1%, the highest since the financial crisis.
On a monthly basis, the inflation rate has exceeded 5% for eight consecutive months since May last year.
The Bank of Korea pulled out a card to raise interest rates, saying that a high inflation rate of around 5% will continue until February this year due to hikes in utility rates, including electricity and gas.
Opinions were divided among the Monetary Policy Committee members as well, saying that the speed of the economic slowdown should be taken into account as to whether interest rates should be raised further.
Regarding the level of the final interest rate, three members of the Monetary Policy Committee said, "Let's keep an eye on the impact for the time being by freezing 3.5%," but three members said, "Let's leave open the possibility of raising it to 3.75%."
However, the Bank of Korea drew a line saying that it is premature to discuss interest rate cuts within the year.
[Lee Chang-yong / Bank of Korea Governor: I think it is premature to talk about it before there is certainty.
I would like to tell you that it is difficult to cut the interest rate unless there is evidence that the inflation level is going to the 2% target level in the mid- to long-term
. He said it could be, and the time was expected to be in the fourth quarter of this year or next year at the earliest.
(Video editing: Kim Jun-hee, VJ: Park Hyun-woo)
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