Korea Bank maintains fixed rates because it establishes measures to cool the housing market in Seoul

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This image, taken on November 24, 2022, shows the construction of Korea Book in Seoul, South Korea.

Wang Yeliang Xinhua News Agency Gety pictures

The Central Bank of South Korea retained 2.5 % on Thursday, establishing the impact of modern measures aimed at cooling the housing market in Seoul.

Housing prices in Seoul increased more than 19 % in June on an annual basis, according to Coldman Sachs, which prompted the financial authorities to Step with measures To quickly process dilated home loans.

Korea Bank referred to “a great acceleration in housing prices in Seoul and its surrounding areas, (as well as) family debts.”

The Central Bank reduced prices at its last meeting in May at a time when the country was in the midst of political turmoil, while also facing a severe tariff on car and steel exports from the United States

While the South Korean economy contracted 0.2 % in the quarter in the quarter in the first three months of this year, amid the growth of the export and activity of the weak construction, the bank chose to maintain fixed prices to address the high temperature in the housing market in the capital.

Bok said it is important to assess the impact of macro policies, given the high risk associated with the housing market in Seoul and the height of family debts, while “remains careful about the possibility of increasing fluctuations in the foreign exchange market.”

Goldman said in a memorandum last week that the recent housing market developments increased Bok’s concerns about financial stability, adding that the growth of household loans rose to 6 trillion Won ($ 4.27 billion) in May – the fastest pace since last October – and it reached 7 trillion Won in June.

“It seems that the housing market in Seoul and the surrounding areas, which have already shown signs of high temperature, stabilized to some extent after the implementation of government debt measures,” Bok said on Thursday.

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However, the central bank is expected to reduce prices in its next meeting with measures to cool the housing market in Seoul. Goldman said that the introduction of new restrictions for mortgage lending “opens the door” for a decrease in a rate of Bok August.

South Korea is facing economic opposite winds, as US President Donald Trump threatened to impose 25 % tariff fees on all South Korean imports starting from August 1, if the country fails to reach a trade agreement with Washington.

South Korea KosPI It increased by 0.74 %, while the victory is enhanced marginally at 1,372.48 against the dollar.



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