Bank of Korea Governor Rhee Chang-yong chairs a policy meeting on Aug. 22, 2024 (Courtesy of News1)
South Korea’s central bank left interest rates unchanged on Thursday as household debt hit a record high amid rising property prices despite the growing expectations that the US Federal Reserve is likely to start easing next month.
The Bank of Korea, as widely expected, kept its benchmark interest rate at 3.50% for the 13th straight meeting, the longest freeze in the central bank’s history.
The decision came after household debt in Asia’s fourth-largest economy rose to an all-time high of 1,896.2 trillion won ($1.4 trillion) in the second quarter with mortgage loans growing on higher home prices.
Investors are keeping an eye on Bank of Korea Governor Rhee Chang-yong’s comments later in the day for clues on when the central bank will cut rates to support the local economy.
The Fed is expected to cut its benchmark lending rate at its upcoming meeting on Sept. 17-18.
The “vast majority” of Fed policymakers indicated it might be appropriate to begin easing next month if inflation continues to slow, the minutes of the central bank’s policy meeting last month showed on Wednesday.
By Jin-gyu Kang
josep@hankyung.com
Jongwoo Cheon edited this article.
