[2024 National Audit] Lee Chang-yong: "Single Interest Rate Cut Does Not Significantly Boost Domestic Demand"

Lee Chang-yong, Governor of the Bank of Korea, is attending the National Assembly's audit of the Bank of Korea held by the Planning and Finance Committee at the Bank of Korea in Jung-gu, Seoul on the 14th, responding to questions from lawmakers. Photo by Kang Jin-hyung aymsdream@

Lee Chang-yong, Governor of the Bank of Korea, stated that it is not easy to revive the domestic economy with just one interest rate cut.

On the 14th, during the National Assembly's Planning and Finance Committee audit, in response to a question from Choi Ki-sang, a member of the Democratic Party of Korea, asking whether the recent rate cut is expected to stimulate private consumption, Governor Lee said, "The effect of a single rate cut will not be significant," and explained, "Since we have now started the pivot (monetary policy shift), the effect on boosting domestic demand will vary depending on how many times and at what pace the cuts are made going forward."

When asked what measures would be taken if private consumption continues to shrink despite the rate cut, he replied, "Since there is a conflicting relationship between household debt and the economic situation, we will respond by appropriately combining measures."

Regarding the current economic situation, he evaluated, "Looking at the overall economy, exports are currently offsetting the sluggish domestic demand, resulting in growth above the potential growth rate," but added, "However, in the domestic sector, especially for self-employed individuals and those with high debt, it is true that the recovery is slow."