Korea's central bank cuts key rate to historic low of 1.75%
- 9 years ago
Korea's central bank cut its key interest rate today to an unprecedented low... of one-point-seven-five percent in an attempt to revitalize the economy.
However, the move... has further prompted concerns about the impact it could have on the country's snowballing household debt.
Joining us live at the news center with the details is our Hwang Ji-hye .
So, Ji-hye, what was behind the rate cut today?
Today's rate cut by a quarter of a percentage point to 1-point-7-5 percent leaves the key rate at a historic low, as Daniel just said,... and marks the third cut in less than a year.
The top central banker said... the economy's current recovery momentum is too weak... and that it could hurt the country's growth potential.
Take a listen.
"We drew the conclusion that the pace of recovery in domestic demand is not meeting our forecast from January. And since we agree on the downside risks, we thought it was better to act preemptively."
Korea's major economic indicators were actually all down this year.
Output, consumption and exports all plunged,... while inflation would have dropped last month, if it were not for a tobacco price hike.
The central bank's move also comes amid a wave of global monetary easing... that China and the eurozone countries are engaged in.
But there must be concerns about the lowered key rate, as Hyun-kyung just mentioned in the beginning,... for example, the household debt issue.
Of course.
In fact, household debt has been one of the major sticking points among monetary policymakers,... as the total debt already exceeds 950 billion U.S. dollars.
The government's deregulation drive in the housing sector and the two rate cuts in the second half of last year worked in tandem to boost housing loans.
With a historically low key rate, there are also mounting concerns about a massive capital outflow,... due to a possible rate hike by the U.S. Federal Reserve in the coming months.
Whether the rate cut will help boost the economy also remains un
However, the move... has further prompted concerns about the impact it could have on the country's snowballing household debt.
Joining us live at the news center with the details is our Hwang Ji-hye .
So, Ji-hye, what was behind the rate cut today?
Today's rate cut by a quarter of a percentage point to 1-point-7-5 percent leaves the key rate at a historic low, as Daniel just said,... and marks the third cut in less than a year.
The top central banker said... the economy's current recovery momentum is too weak... and that it could hurt the country's growth potential.
Take a listen.
"We drew the conclusion that the pace of recovery in domestic demand is not meeting our forecast from January. And since we agree on the downside risks, we thought it was better to act preemptively."
Korea's major economic indicators were actually all down this year.
Output, consumption and exports all plunged,... while inflation would have dropped last month, if it were not for a tobacco price hike.
The central bank's move also comes amid a wave of global monetary easing... that China and the eurozone countries are engaged in.
But there must be concerns about the lowered key rate, as Hyun-kyung just mentioned in the beginning,... for example, the household debt issue.
Of course.
In fact, household debt has been one of the major sticking points among monetary policymakers,... as the total debt already exceeds 950 billion U.S. dollars.
The government's deregulation drive in the housing sector and the two rate cuts in the second half of last year worked in tandem to boost housing loans.
With a historically low key rate, there are also mounting concerns about a massive capital outflow,... due to a possible rate hike by the U.S. Federal Reserve in the coming months.
Whether the rate cut will help boost the economy also remains un