Lee Jae-myung "Government Must Establish Measures to Prevent Harm to Ordinary People from Interest Rate Hikes"

[Asia Economy (Suwon) = Reporter Lee Young-gyu] Lee Jae-myung, Governor of Gyeonggi Province, expressed concern on the 26th regarding the Bank of Korea's decision to raise the base interest rate by 0.25 percentage points, stating that "although it is inevitable, the interest rate hike should not become a burden for ordinary citizens."

Through Facebook on the same day, Governor Lee said, "Today, the Monetary Policy Committee raised the base interest rate from 0.5% per annum to 0.75%," adding, "Considering that the expansionary financial and monetary policies to respond to COVID-19 since last year have caused a rapid increase in liquidity, which is becoming a source of instability, the interest rate hike is inevitable."

He particularly noted, "In Korea, the rapid increase in household debt is becoming a potential risk factor, and active management of interest rates is essential to curb speculative demand in real estate," adding, "However, I am concerned that the base interest rate hike could lead to a burden on ordinary citizens."

Furthermore, he emphasized, "Cooperation from financial companies is necessary so that the burden of this interest rate hike does not fall solely on ordinary citizens," and "For real demanders aiming to purchase their own homes, active measures such as extending the repayment period of principal and reducing interest should be implemented."

Governor Lee's argument is that domestic financial companies must fulfill their social responsibilities and share the pain to help ordinary citizens who may face difficulties due to this interest rate hike.

He also urged, "The government should prepare measures for self-employed individuals and small and medium-sized enterprises who will face greater hardships due to the interest rate hike," and "In the COVID-19 crisis situation, the suffering of financial consumers should not result solely in profits for financial companies, so a review of the interest rate spread should be conducted."

Moreover, he said, "We could consider providing incentives when financial companies voluntarily and actively implement various policies to reduce the burden on real demanders," and "Please actively promote financial support and burden relief for non-homeowners to help them purchase their own homes so that the housing market can achieve a soft landing."

Meanwhile, the Bank of Korea raised the base interest rate by 0.25 percentage points to 0.75% on the day, up from 0.5% in May last year, when it was lowered due to COVID-19, marking the first increase in one year and three months.

This content was produced with the assistance of AI translation services.