Bank of Korea keeps base rate at an annual 2.50%…3rd consecutive freeze amid real estate concerns

The Bank of Korea on the 23rd held a Monetary Policy Board meeting on the direction of monetary policy and decided to maintain the base interest rate at an annual 2.50%.

After lowering rates from an annual 2.75% to 2.50% in May, the Bank of Korea froze rates in July and August and chose a third consecutive freeze on this day.

This decision matched market expectations. The 20 economic experts of the Hankyung Economist Club all expected a rate freeze in a recent survey.

The Bank of Korea's rate freeze is understood to be because the continued rise in real estate prices has increased the possibility of financial instability. It is interpreted that, with the government having introduced measures on June 27 followed by October 15 to curb real estate prices, the Bank of Korea judged there was no reason to lower rates to expand liquidity. Earlier, Governor Lee Chang-yong of the Bank of Korea also attended a National Assembly audit and said, "I do not intend to play a role in lighting a fire under the real estate market by increasing liquidity further."

Reporter Kang Jin-gyu josep@hankyung.com