BOK stays pat, won't move to change direction, but wary of over-speed in Kospi
이 글자크기로 변경됩니다.
(예시) 가장 빠른 뉴스가 있고 다양한 정보, 쌍방향 소통이 숨쉬는 다음뉴스를 만나보세요. 다음뉴스는 국내외 주요이슈와 실시간 속보, 문화생활 및 다양한 분야의 뉴스를 입체적으로 전달하고 있습니다.
The Bank of Korea chose to stay pat in the first rate-setting meeting for 2021 Friday and maintained to keep monetary policy loose and accommodative of the fragile economy under Covid-19 fallout, although raising concerns for excessive consumer capital concentration in the stock market from easy and cheap liquidity.
“Over-speeding (vehicle) can shake even at a small shock. Stocks can come under correction at changes in global monetary policies, unexpected geopolitical risk or upset in the Covid-19 vaccine rollout,” BOK Governor Lee Ju-yeol in an online press conference after the monetary policy meeting.
“Although it is difficult to find the latest Kospi run as bubble, the rise is overly fast against past charts,” he said.
Debt-financed stock investment could cause “intolerable” woes for investors, he warned.
BOK’s inaction was largely expected as liquidity is already lush due to years of record-low interest environment and bubbly assets from housing and stock frenzy, despite limping economy due to the fallout of year-long Covid-19.
Lee stressed it was too early to speak of any change in monetary policy direction. “Given the uncertainties in the economic developments and dangers in the weak class, the difficulties won’t be resolved in a short time,” he said.
Monetary authorities are closely watching the market in cases of steep correction but shrugged off worries of immediate financial risk as debt financing is still cheap and spread out over long-term maturities.
Korean debt in both private and public sector surged by record levels last year. Household loans added 100.5 trillion won on year to 988.8 trillion won and corporate borrowings by 107.4 trillion won to 976.4 trillion won as of December. Fiscal deficit also stretched by around 119 trillion won for an estimated outstanding debt of 847 trillion won at the end of last year after the government raised four supplementary budgets through debt financing to fight the virus crisis.
Most believe the BOK won’t shift to rate normalization until clear sign of recovery next year.
The BOK governor in his new year’s address had said “it is necessary to keep the monetary policy loose as the uncertainties for growth are high and the inflation is expected to hover below the target for a considerable period.”
Global economic analyst Trading Economics in a recent report predicted the BOK to maintain the policy rate steady at 0.5 percent this year and incrementally normalize to 1.25 percent, the level before the Covid-19 pandemic.
The financial market stayed mostly calm. The yield of the benchmark 3-year government bond ended the Friday morning session at 0.987 percent, down 1 basis point. The Korean won finished the day down 0.12 percent at 1,099.40 against the U.S. dollar, the main bourse Kospi 2.03 percent lower at 3,085.90.
[ㄏ Maeil Business Newspaper & mk.co.kr, All rights reserved]
Copyright © 매일경제 & mk.co.kr. 무단 전재, 재배포 및 AI학습 이용 금지
- S. Koreans advised against overseas travel until Feb 15 - Pulse by Maeil Business News Korea
- Market Kurly projects to have achieved near $1 bn sales milestone last year - Pulse by Maeil Business News Korea
- Celltrion submits IND for Phase 3 study of Prolia biosimilar in US - Pulse by Maeil Business News Korea
- Fuel stations evolve with fast addition of EV chargers in S Korea - Pulse by Maeil Business News Korea
- SK Innovation bumps up debt offering upon 7-times oversubscription - Pulse by Maeil Business News Korea
- 강경준, 상간남 피소…사랑꾼 이미지 타격 [MK픽] - 스타투데이
- “짧지만 홀린다”…숏폼 마케팅 [스페셜리포트]
- “‘음악’으로 맺어진 ♥”…윤보미·라도, 8년째 열애 ‘인정’(종합)[MK★이슈] - MK스포츠
- 이찬원, 이태원 참사에 "노래 못해요" 했다가 봉변 당했다 - 스타투데이
- 양희은·양희경 자매, 오늘(4일) 모친상 - 스타투데이