Bank of Korea (BOK) Monetary Policy Board held a meeting this morning and,
raised the benchmark interest rate from 2.5% to 2.75% by 0.25 percentage points for the first time in 3 years and 6 months!
I thought it wouldn't be until the end of the third quarter, but it progressed faster than expected.
Starting with this, gradually raising it by more than 1% to narrow the Korea-US interest rate differential,
leading to a decline in the won-dollar exchange rate (won appreciation) -> a decrease in import prices -> a decrease in household burden.
It would be good if it were linked with policies such as the realization of holding taxes for high-priced apartments or speculative apartments and lowering transfer taxes to stabilize real estate.
Meanwhile, there is a saying that stock market funds will flow into deposits when interest rates rise. Even if the average return of the US stock market is unknown, wouldn't a benchmark interest rate increase 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 KOSPI are unlikely to give up stocks and switch to deposits just because of a 1~2% increase in deposit interest rates.
