[Anchor]
The presidential office expressed regret over the decision by the Bank of Korea to freeze the key interest rate, particularly from the perspective of boosting domestic consumption.
This rare intervention in the interest rate decision was due to the government deeming the domestic consumption weakness significant, with plans to announce stimulus measures for consumer spending next week.
Reporter Kang Hee-kyung reports.
[Reporter]
The presidential office took an unusual stance in response to the Bank of Korea’s decision to freeze the key interest rate, expressing regret from the standpoint of boosting domestic consumption.
While acknowledging that interest rate decisions fall within the unique authority of the Bank of Korea’s monetary policy committee, the presidential office emphasized the need for a rate cut to revitalize consumer spending amid the recent domestic consumption slump.
With the government set to announce consumer stimulus measures next week ahead of the Chuseok holiday, it was suggested that lowering interest rates would have maximized the effectiveness.
The Bank of Korea also acknowledged the slow recovery of domestic consumption. However, it decided to maintain the interest rate, placing more emphasis on concerns regarding housing prices and household debt.
[BOK Governor Lee Ju-yeol: While there is a possibility that growth momentum may weaken with the delay in domestic consumption recovery, in the current situation, lowering interest rates may lead to a rise in real estate prices and increased exchange rate volatility…]
In response, the presidential office explained that the household debt-to-GDP ratio has continued to decrease, with the household debt ratio standing at 93.6% at the end of last year and steadily decreasing from 2021 onwards.
Regarding real estate, the government reiterated the need for prioritizing consumer spending at the current time, given the various measures in place to address issues related to real estate.
The presidential office clarified that its statement following the interest rate decision was not intended to pressure the Monetary Policy Committee, stating that a rate cut in October is likely following the U.S.’s rate cut next month.
This is YTN Kang Hee-kyung.
Filming: Choi Young-wook, Jung Tae-woo
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