<Anchor> This
is a friendly economic time.
Today, I will be with reporter Han Ji-yeon.
Hello reporter.
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 rate would rise to 2.5%, but now it can go up to 2.75%.
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 go up 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 a baby step that raises 0.25 percentage points is more appropriate than a big step that raises 0.5 percentage points at a time, so you have to raise the interest rate by 0.25 percentage points at each meeting to get 1 percentage point. There are calculations that can be done.
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 a big step remains open.
<Anchor>
After all, the reason interest rates are raised like this is because of inflation.
But looking at this week, the World Bank and the OECD lowered their forecasts for global economic growth, giving out forecasts that inflation could go not only this year, but also next year and even the year after.
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 you should worry about the fact that it is not even the actual inflation rate, but it is because actions based on the idea that inflation will rise affect the actual inflation.
For example, fear of rising prices causes workers to demand a wage increase from the company.
This is also 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 ours, 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 inflation rate increases by 0.06 percentage points.
This is called the exchange rate pass-through 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, out of the 3.8% consumer price inflation, the exchange rate contributed about 9%, or 0.34 percentage points.
The rate and speed of exchange rate appreciation has accelerated considerably since the Ukraine crisis.
At one point last month, it was over 1,290 won.
There are many forecasts that the US Fed will take a big step on the 14th, but there are concerns that the dollar will continue to strengthen and increase domestic inflation pressure.
<Anchor>
As the base rate continues to rise like this, we talked about in our friendly economy, but 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, 3 months or 6 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.
What is happening in Ukraine right now?
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.