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[앵커]
The Bank of Korea will hold its final decision meeting on the interest rate tomorrow.
It was frozen for the first year after raising the interest rate to 1.5% last November.
While the global financial market is raising interest rates, the central bank is increasingly interested in raising the key rate.
I would like to anticipate with Cho Young-moo from the LG Economic Research Institute.
If you increase the interest rate in the current situation, if you freeze it as you go up, it seems that the wavelength is not enough to freeze.
I will take both of these factors.
First, let's start with the factors that make it difficult to raise interest rates.
[답변]In general, central banks raise interest rates when their economy is good or inflation is rising.
In other words, the rate hike is aimed at preventing the overheating of the economy and causing side effects such as inflation and the badet bubble.
We are concerned, however, about the economic slowdown as we expect economic growth to slow down next year due to weak investment and a slowdown in employment.
It is argued that interest rate increases are not appropriate because of rising costs, such as rising oil prices and agricultural prices, rather than rising demand resulting from the economic recovery.
[앵커]So what is the position of the person who claims to raise interest rates?
[답변]The most important factor is the inversion of the key rate, which continues to grow externally, and the concern over capital outflows.
The reversal of the key rate, which is 0.75% p since the reversal of March this year, should reach 1% p if we raise interest rates in December without raising interest rates.
In the domestic market, we are concerned about the side effects of low interest rates.
The Bank of Korea (BOK) recently expressed a financial imbalance and argues that it is necessary to raise interest rates to solve the problem of increasing household indebtedness and rising housing prices.
[앵커]It is a form of dilemma that can neither do it nor do it, but one of them has to make a choice.
So, what choice does the Bank of Korea make?
How do you expect?
[답변]It is believed that the opportunity to raise the interest rate in a year at the last MPC meeting in November is much higher than that of the October MPC.
This is much more than experts plan to freeze on the financial markets experts who expect an increase in interest rates.
The pressure on the Bank to raise interest rates from abroad is very strong and the Bank has decided to raise the interest rate internally, but it seems highly likely that the Bank would have to raise rates that would not be possible. not be increased due to economic uncertainties.
[앵커]If interest rates are raised in a situation where domestic and external economic conditions are not good, it is feared that the recession will worsen.
Are you going against the recession?
[답변]If you do not raise interest rates in a good economic situation like the United States, but because of the slowdown in the economy, other factors may increase the rates of interest. Interest and make the economy more difficult.
The fact that the economy is not good means that household income and business growth are sluggish.
In this situation, if the interest rate on the loan rises and charges increase, households with declining disposable income can reduce consumption, and firms whose performance deteriorates may reduce investment and employment. which may weigh on the recovery of domestic consumption.
In terms of exports, we can reduce the competitiveness of export prices of Korean companies by increasing the value of the Korean won.
[앵커]I worry that buyers in my home, due to low interest rate hikes, will be trapped.
However, if the interest rate is raised, the growth rate of household debt will decrease. It looks like a double-edged sword?
[답변]If the benchmark interest rate is raised and the lending rate, this will further reduce the rate of growth of household debt.
However, the growth rate of household debt, which exceeded 10% in 2016, has recently fallen to 6% and will become even more so when additional household loan control measures, such as DSR regulations, will be implemented. artwork.
Even if the Bank of Korea does not raise interest rates, the growth rate of household debt will probably fall to 5%, either the nominal economic growth rate or the growth rate of household income. households of the Korean economy.
On the other hand, the rise in interest rates suggests that households and businesses with low debt repayment capacity, especially those with higher loan thresholds due to loan regulation, exit the banking sector with poor loan conditions. Non-residential mortgages are likely to have increased significantly and interest rate hikes will likely have a negative impact first and foremost.
[앵커]What I kept saying in politics was to raise interest rates to stabilize the real estate market.
If the price of real estate goes up to the interest rate with the price falling, what will happen to the real estate market?
[답변]There is even a big difference in the visibility of the real estate market.
Some think that the real estate market is stable because the price of real estate does not increase much more, but some believe that the price of real estate market, which has risen sharply, is stable.
If the recent rise in real estate prices decelerates and interest rates rise, it is inevitable that real estate price increases will be slowed further or that the downward pressure will increase.
Since last year, housing prices in some areas, such as Seoul, have skyrocketed and those in some regions, such as Busan and Gyeongnam, have shown a downward trend.
The impact of rising interest rates may be limited to slowing housing price increases in some areas, but this may result in a sharp drop in housing prices in some areas.
[앵커]This is the US interest rate that plays a very important role in determining our benchmark interest rate.
Chairman of the Federal Reserve, Jerome Powell, said the benchmark interest rate of today was just below neutrality.
What does it mean,
Will there be a change in the base rate hike in December?
[답변]In the current financial market, the Fed is expected to raise the interest rate by 80% given the Fed's rate hike in December.
However, it is increasingly likely that interest rate hikes after next year will not be able to significantly increase interest rates compared to initial expectations.
This is because of the prospect that the US economy will be shocked by the prolongation and intensification of the US-China trade conflict and that the House of Representatives of the Democratic Party in the midterm elections will entail a reduction in tax cuts and a policy of expanding the investments of civil society.
[앵커]If this is the case, will the burden of our country go down slightly?
[답변]If the rate hike in the United States decelerates and the end of the rate hike is delayed, we have difficulty raising the key rate reversal rate between Korea and the United States.
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