[경제][현장영상] The Bank of Korea raises interest rates in one year … Context and Prospects?

What is the background of the increase and what will be the direction of monetary policy in the future.

As you know, the Monetary Policy Committee has decided to raise the Bank of Korea interest rate from 1.50% to 1.75% currently.

I will briefly explain the context.

In view of the external conditions since the October monetary policy decision meeting, the global economy seems to have maintained a generally good growth trend.

For the major countries, the United States has been growing steadily, with employment and consumption continuing to rebound.

The euro area and Japan experienced a slowdown in growth in the third quarter, mainly due to auto regulations and natural disasters.

In the emerging economies, ASEAN countries continue to grow steadily, with growth at 6% in the third quarter due to slower investment in China.

In the international financial market, price movements were high in developed countries due to concerns about slowing corporate performance and lower equity and interest rates.

However, in emerging economies, the concern of securities investment funds and the rise in the value of the currency have somewhat eased the malaise in the financial markets.

While the real national economy is undergoing adjustments in investment in facilities and construction, consumption is increasing moderately and exports are showing a good trend.

Although uncertainty is high in the future growth path, we expect the current trend to continue.

Consumer prices rose 2% in October, along with prices for agricultural products and oil.

However, core inflation excluding food and energy prices has remained around 1% since July.

Consumer price inflation should be around the target for some time, but it should be slightly lower and fluctuate between 1% and 2%.

The core inflation rate, currently around 1%, is expected to increase gradually.

In the domestic financial market, the volatility of key price variables, which rose sharply last month, edged down in November.

The stock price was affected by stock market movements of the major countries and fell sharply in October, but rebounded this month and the long-term market interest rate has declined.

The KRW / USD exchange rate has fluctuated due to fluctuations in world stock prices and dollar value, but has decreased slightly since the last MPC meeting.

Loans to households increased substantially in October and continue to grow faster than income.

At the same time, housing prices, which have increased significantly in some areas of Seoul and other metropolitan areas since July, have slowed since October due to measures to stabilize the housing market.

The BOK is expected to announce that the Korean economy will grow at a level not significantly different from the potential growth rate and that the inflation rate will rise to a level close to the inflation target. If the base rate remains at the same level, Given the possibility of financial stabilization risks, we decided to adjust the easing of monetary policy and raise the key interest rate by 0.25%.

This time, the base rate has been raised by 0.25 percentage points, but the trend of monetary policy continues to weaken.

With regard to the future direction of monetary policy, we plan to determine whether to further adjust the degree of mitigation taking into account macroeconomic conditions such as economic stability, inflation and financial stability. During this process, we will look closely at the effects of rising base rates and external uncertainty factors on growth and inflation, as well as the increase in household debt.

The Bank of Korea (BOK) decided to raise the benchmark interest rate by 0.25 point today and Cho Dong-cheol and Shin In-seok pointed out that it was desirable to maintain the benchmark interest rate at the current level.