Bank of Korea Governor Expresses Concern Over Rapid Housing Price Increases

Bank of Korea Governor Rhee Chang-yong highlighted a concerning trend in the South Korean housing market during a press conference on July 10. He noted that the current rate of housing price rise, particularly in the metropolitan area, is accelerating faster than it did in August of the previous year.

Monetary Policy and Housing Market Stability

Following the Bank of Korea’s Monetary Policy Committee's decision to keep the base rate steady at 2.50% per annum, Rhee shared his apprehensions. "The sense of vigilance is more intense than last August," he stated, reflecting on the challenges of managing the housing market's volatility.

Call for Stronger Macroprudential Policies

Rhee advocated for an enhanced role for the central bank in macroeconomic policy discussions, emphasizing the need for a collaborative approach among key financial institutions. He pointed out the persistent issue of household debt and the necessity for a robust framework to implement macroprudential policies effectively.

Addressing Non-Banking Financial Institutions' Challenges

The governor also touched upon the growing concerns related to non-banking institutions, particularly in real estate project financing, urging for expanded oversight and authority to ensure financial stability.