SEOUL, Sept 30 (Askume) – South Korea’s central bank governor said on Monday he had recently met board members with a view to reining in household debt, when asked about the possibility of an interest rate cut next week.
Responding to a reporter’s question about market expectations for an interest rate cut in October, Lee Chang-dae said, “I have not yet been able to discuss the implications of government policies with members of the monetary policy committee.”
“On this matter, I think it would be appropriate to discuss it with the board and discuss it at the policy meeting, so I will not make any comment today,” Rhee said. He also declined to comment on the possibility of further rate cuts next month and beyond.
His comments come amid expectations that the central bank will lower its policy rate to below 3.50% at its upcoming rate-setting meeting, the highest level since late 2008, to support domestic demand.
Last week, one board member said government measures to curb household debt are expected to take effect gradually, while another said there is growing demand for a rate cut, adding they need to see more data.
The Bank of Korea last month unanimously decided to keep interest rates steady at 3.50% as board members worried about rising housing prices and debt. Its next meeting will be on October 11.
