South Korea’s Yoon says to ‘manage’ policy rates if housing market heats up By Reuters

SEOUL (Reuters) – South Korean President Yoon Suk Yeol said on Thursday there was a need to “manage” monetary policy interest rates if expectations of lower borrowing costs lead to further price rises in the housing market already hot of the country.

“It won’t matter if (home buying) is real demand, but if speculative demand arising from asset management purposes will push up house prices, we will manage policy interest rates. We need to make clear messages on this to calm the overheated sentiment,” Yoon said during a televised news conference.

The Bank of Korea (BOK) said at its meeting on August 22 that it was time to prepare to reduce interest rate cuts after leaving the benchmark rate steady at a 15-year high of 3.50 percent for 13- consecutive meeting, as expected.

Yoon did not explain whether he plans to manage policy interest rates set by the BOK or borrowing costs related to financing local mortgage product policies.

The BOK’s independence to set policy interest rates is guaranteed by law, but governments have a history of pressuring the seven-member board to cooperate on the direction of policy.