[Economy PICK] "The End" of the era of monetary tightening...Base rate 3.5% → 3.25%

[Anchor]
Park Ki-wan, a reporter from the Ministry of Economy, is here.

Let's look at the first keyword of economic pick, the video.

The era of monetary tightening is finally over.

[Reporter]
Yes, the Bank of Korea's Monetary Policy Committee has cut its benchmark interest rate.We adjusted from

3.5% to 3.25%, down 0.25%.

This marks the pivot, or monetary policy shift, three years and two months after the start of the rate hike after the longest freeze.

The reason for adjusting interest rates is simply to revive the domestic economy, which has been suppressed by high interest rates and prices.

[Anchor]
I see.
Let's take a closer look at the background of the
rate cut.

[Reporter]
Yes, first of all, the U.S. interest rate cut can be cited as the background.

The fact that our consumer price growth rate last month was 1.6%, the lowest in three and a half years, also affected it.

The rise in apartment prices in Seoul, which used to be hot, seems to be slowing down.

The gains slowed for the fourth straight week, up 0.1% from the previous week.

Household debt growth has also decreased.

Household debt increased by 9.7 trillion won in August, but it was estimated to have increased by 5.2 trillion won last month.

Amid the growing need to support the domestic economy, which has seen both consumption and investment decline, the Bank of Korea has decided to cut interest rates.

[Anchor]
I wonder what kind of message Governor Lee Chang-yong has issued.

You also expressed your intention for further reductions?

[Reporter]
Yes, Governor Lee Chang-yong said, "We can afford to cut the benchmark interest rate further for the time being."

However, he said that it is not a situation where it will fall by a "big cut" and 0.5%p like the U.S., and that the speed will be determined by looking at the financial market situation.

I also didn't forget the so-called Young Klais warning.

Let's listen to it.

[Lee Chang-yong / Governor of the Bank of Korea: We're considering financial stability that's not overseas, so let me tell you that if you want to make a gap investment, you should consider your own financial costs and how much you can afford.]

Some pointed out that the Bank of Korea missed the timing.

Lee countered that household loans increased by nearly 10 trillion won in August, even though he did not cut interest rates.

The Bank of Korea predicted that the burden of household loan interest will be reduced by 3 trillion won per year if the market's loan interest rate decreases as the base rate has fallen.

However, there are still concerns that household debt growth, which has subsided due to strong "loan tightening," will revive due to a cut in interest rates.