South Korea’s Yoon Proposes ‘Management’ of Policy Loan Rates Amid Potential Housing Market Surge, Reports Reuters

South Korean President Yoon Suk Yeol emphasized the importance of “managing” policy loan rates on Thursday, in light of potential lower borrowing costs possibly fueling further increases in the already heated housing market.

During a televised news conference, Yoon stated, “If home buying is driven by real demand, that won’t be an issue. However, if speculative demand related to asset management causes home prices to rise, we will adjust our policy interest rates. It’s crucial for us to communicate this clearly to temper the overheated sentiment.”

A representative from the Presidential Office later explained that Yoon’s comments were specifically about policy loan interest rates. The official pointed out that interest rates on policy-backed mortgages and other loans had risen since August 16, as they were significantly lower than market averages.

The official added, “The slight increase in policy loan interest rates was intended to moderate the growth of loans.”

Additionally, the Bank of Korea indicated during its August 22 meeting that it was time to consider lowering interest rates, after maintaining the benchmark rate at a steady 3.50% for the 13th consecutive meeting, the highest level in 15 years.