Bang Gi-seon "Customized Financial Support Measures for Vulnerable Borrowers Due to Interest Rate Hikes to Be Implemented Without Delay"

Discussion on Measures to Address Vulnerable Sectors During Interest Rate Hike at the Macroeconomic and Financial Meeting

Bang Gi-seon, the 1st Vice Minister of the Ministry of Economy and Finance, is presiding over the Macroeconomic and Financial Meeting at the Bankers' Hall in Jung-gu, Seoul on the 13th. Photo by Moon Ho-nam munonam@

[Asia Economy Sejong=Reporter Kim Hyewon] The government announced on the 13th that it will implement customized support measures to alleviate the financial burden on vulnerable borrowers due to interest rate hikes.

Bang Kiseon, the 1st Vice Minister of the Ministry of Economy and Finance, held a macroeconomic and financial meeting at the Bankers' Hall in Seoul on the same day and said, "With the U.S. September Consumer Price Index announcement tonight and the U.S. Federal Open Market Committee (FOMC) interest rate decision early next month, overseas uncertainties remain, and we cannot afford to lower our guard even slightly."

Earlier, the government decided to extend the maturity extension measure for small business loans, which was scheduled to end at the end of last month, by up to three years, and the repayment deferral measure by up to one year.

Additionally, to ease the financial burden related to housing for low-income households, the supply scale of the Safe Conversion Loan, which allows switching from variable to fixed interest rates, was expanded from 40 trillion won to 45 trillion won, and the Korea Housing Finance Corporation's low-interest jeonse loan limit was increased from 200 million won to 400 million won. The income deduction for principal and interest repayment on jeonse and monthly rent loans was raised from 3 million won to 4 million won annually.

The Safe Conversion Loan interest rate for low-income youth was further reduced by 10 basis points, and the loan limits for youth (from 70 million won to 200 million won) and newlyweds for jeonse loans (Beotimok) were also expanded.

Regarding the Bank of Korea's 'Big Step' (a 0.50 percentage point base rate hike) announced the previous day, Vice Minister Bang evaluated that "the expectation of the rate hike was pre-reflected, and the resulting impact on the financial market was limited." However, he added, "Given the unprecedented global uncertainties, we are maintaining a high level of vigilance and carefully monitoring market conditions."

He stated, "To reduce stock market volatility, we will promptly proceed with the signing of purchase commitments for the Securities Market Stabilization Fund," and added, "We will also thoroughly conduct periodic inspections of corporate funding markets such as the corporate bond and short-term money markets, as well as the funding market conditions of the secondary financial sector, including securities and specialized credit finance companies."

He continued, "To stabilize the bond market, the Ministry of Economy and Finance took emergency treasury bond buyback measures at the end of September, and the Bank of Korea conducted simple treasury bond purchases. We will expand the purchase capacity of the corporate bond and commercial paper market support program from 6 trillion won to 8 trillion won."

Vice Minister Bang said, "We will do our best to mitigate the negative effects caused by recent external conditions such as a strong dollar," and added, "To structurally improve the current account balance, we will swiftly prepare new measures and continue efforts to enhance domestic investment attractiveness, including attracting returning companies and foreign-invested companies, as well as inclusion in the Morgan Stanley Capital International (MSCI) index and the World Government Bond Index (WGBI)."

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