The central bank chief said Tuesday that interest rate policy alone cannot control real estate prices, and the bank seeks to stabilize the housing market by preventing an oversupply of liquidity.
Bank of Korea Gov. Rhee Chang-yong made the remarks during a lecture at Seoul National University, as the central bank held its key rate steady for the second consecutive time during a rate-setting meeting late last month amid persistent concerns about rising housing prices and household debt.
"Putting off a rate cut by a month or two would have little impact on the economy. If housing prices in Seoul rise in response to a rate-cut signal, however, it would make things even more difficult," Rhee said. "We would not fuel the real estate market through liquidity supply."
The central bank began its monetary easing cycle in October and has since cut the key interest rate by a combined 100 basis points, with the most recent reduction delivered in May.
The BOK has acknowledged the need to cut key rates to support the weak economy but stressed the trade-off between preserving financial stability and fostering growth.
Speaking of a won-denominated stablecoin, Rhee called for a cautious approach as it could "destabilize the monetary system while its potential benefits are not clear."
"Creating a won-based stablecoin does not prevent the penetration of dollar-denominated ones. Some say that issuing a stablecoin first would make us a 'Stablecoin G2,' but it is just fear-mongering," the governor said. (Yonhap)
