South Korean President’s Remarks on Housing Market

SEOUL (Reuters) – South Korean President Yoon Suk Yeol stated on Thursday the need to “manage” policy loan rates to prevent further price increases in the already hot housing market.

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

An official at the Presidential Office later clarified that Yoon was referring to policy loan interest rates. The official noted that interest rates on policy-supported mortgages and other loans increased from August 16 as they were significantly lower than market rates.

“The slight increase in policy loan interest rates was designed to pace the loan growth,” the official said.

The Bank of Korea (BOK) indicated at its August 22 meeting that it was time to prepare to cut interest rates after maintaining the benchmark rate at a 15-year high of 3.50% for the 13th consecutive meeting.