Key interest rate cut for the first time in three years… “Now is the time to revive domestic demand”

◀ Anchor ▶

The Bank of Korea lowered its interest rate by 0.25% point for the first time in three years and two months.

This has been interpreted as meaning that, as a result of the judgment that prices are rising, money will be released to revive the sluggish domestic economy.

This is reporter Jeong Hye-in.

◀ Statement ▶

The barrier to the base interest rate of 3.5%, which had been in place since last January, has been broken.

The Bank of Korea’s Monetary Policy Committee decided to lower the base interest rate by 0.25% to 3.25%.

This is a reversal from the hard stance that has lasted for more than three years from August 2021.

This is because the inflation rate has fallen below 2% and the growth of household debt has also slowed.

Above all, to encourage a slow recovery in domestic demand, we decided that we must now reduce the interest burden to revive private consumption and investment.

[이창용/한국은행 총재]

“Even if domestic demand is recovering, it is below the potential growth rate. . . .”

The government also welcomed him.

[최상목/부총리 겸 기획재정부 장관 (국회 기재위 국정감사)]

“For now, we respect and welcome the decision to lower interest rates. ”

However, it is a burden that house loans, which have been suppressed, could increase again by stimulating the demand of real estate.

President Lee Chang-yong issued a warning again against the so-called ‘Yeongkkeul tribe’.

[이창용/한국은행 총재]

“If you want to invest a gap, do it while considering things like your financial costs and what you can afford. ”

Governor Lee said, “There is room to lower interest rates further,” but said he would make a decision based on the financial situation.

This is because the international situation, such as the crisis situation in the Middle East and the US presidential election, is still changing.

However, in the outlook for interest rates for the next three months, five out of six members of the Monetary Policy Committee expressed their view of ‘holding interest rates’, leaving more cuts are likely to be made within the year.

This is Jeong Hye-in from MBC News.

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