Minister Urges S. Korea to Be Aware of Excess Liquidity

Amid rising concerns that the record-low rates might already be leading to a jump in property prices, the nation's finance chief on Saturday said South Korea needs to exercise "cautious judgment" on excessive liquidity, Yonhap news agency said.

"Cautious judgment is needed because of problems such as inflation, asset bubbles and moral hazards if we maintain expansionary policies too long," Finance Minister Yoon Jeung-hyun said in a forum hosted by the Korean Chamber of Commerce and Industry on this southern island of Jeju.

Yoon also warned that a sudden influx into the money supply and easy credit could create asset bubbles and other problems.

The government injected some $50 billion in spending to prop up economic growth. On the back of huge stimulus spending and record-low interest rates, the economy grew 2.3 percent in the second quarter of this year, marking the fastest growth in nearly six years.