Rate cut unlikely to raise home prices: BOK board member
An aerial view of apartment buildings in Songpa District, Seoul, is seen in this photo, March 19. Yonhap
A potential rate cut by the Bank of Korea (BOK) here is unlikely to stoke home prices, a BOK monetary policy board member said Tuesday.
The country's central bank froze its key rate for the ninth straight session at 3.5 percent last month amid slower-than-expected inflation moderation and high household debt.
The rate freezes came after the BOK delivered seven consecutive rate hikes from April 2022 to January 2023.
But the central bank is widely expected to start monetary easing after June amid easing inflation and a slowdown in private spending.
"It is true that a rate cut usually boosts home prices and household debt, but the chance is slim for now," Suh Young-kyung told reporters.
The central bank has maintained a restrictive stance, but a slight adjustment is not enough to trigger a financial imbalance, she said.
"People's expectations play a key role in boosting household debt and housing prices, but the level of such expectations is not high or low," the BOK's board member said, adding that the growth in household debt slowed this year and home prices have stabilized. (Yonhap)