The Bank of Korea Monetary Policy Committee (MPC) held a monetary policy direction decision meeting this morning and,
raised the base interest rate from 2.5% to 2.75% by 0.25 percentage points (p) for the first time in three years and six months!
I thought it wouldn't be until around the end of the third quarter, but it progressed faster than I expected.
Starting with this, we hope to gradually raise it by more than 1% to narrow the Korea-US interest rate differential and reduce the won-dollar exchange rate (appreciation of the won) -> reduce import prices -> reduce household burdens.
In conjunction with policies such as the realization of holding taxes for high-priced apartments or apartments for speculative purposes and a reduction in transfer taxes, we also hope to stabilize the real estate market.
Meanwhile, it is said that stock market funds will flow into deposits as interest rates rise. But even if the average return of the US stock market is unknown, wouldn't a base interest rate of about 1% be meaningless considering the return of the KOSPI last year?
For example, shareholders who have seen a return of over 100% from the KOSPI are unlikely to abandon stocks and switch to deposits just because of a 1~2% increase in deposit interest rates.
