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Buildings roured and houses illumine in the creppy in the South Korea, on Friday, on 16 years, 2024.
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Central Bank, for and Great, have a warrant of the general: To ensure the price stability and inflation in a country. Policies in South Korea need to tell you with another responsibility: Manage home debt.
References to home debt often, if not always, come in the Bank of Korea’s monetary policy decision. I am
The governor of Bok Rhee Chang Yong told A speech on January 2 that “there was any critical as to the Korea’s bank takes the home debt in account and appear too cautious when you decide the basic rate.”
Why is the house’s debt so important for the bowalary’s monetary considerations? The short answer: is too high. The long answer? Much more complicated.
Park Gamewo, Nomura and Taiwan Egnum, he said to CNBC that Bok is concerned about the length of long-term growth.
“The bok thinks [the] The higher debt load has debiled the power of household house. At the same time, Adpanished Fortitude Deman Reported in distorted capital allocation through the economated, guiding capital sectors does not
Unique system of accommodation
Two factors contributing to the high amount of debt between families in Korea of the Pistreatment, and the unique system in South Korea.
The excisesful status points may of course they acquire their own doctral home, but for those you may not be in duty.
But they simply regain systems, Korean rents appear a deposit, as per the SAMUEL Rhee, as per Samuel Rhee, “instead of a prespace, presents, presents.
The jeononice is a deposit about 50% -80% of the property market value. At the end of his lease, the deposit has returned to the rest. For the owner, the Lord is a loan without interest, which are free to invest.
However, the rectors usually take a loan to fund the Jeonse deposit, which Rhee said that cause “very short and excessive debt.”
Doesn’t utter the debt of the ratio debt is significantly in the past few years, rising the interest rates have increased the debt, the primary concern for the Bok and Bok’s Government . “.” “
Rhee pointed that as the BOK has cut the rates twice to bring it to 3% at the end of last year, banks have not passed to the consumer interest rates.
This means that as the BOK has cut rates, the costs of rental interest are not down.
‘Economic catastrofe’
Ryota Abe, that is an Economist in Global Markets to Asia Pacific in Sumitermo Mixed Bank in the South Dawn for Southeast Market, from affecting the economic seventh
“In case [a] Cornch is going on because the provisions are unable to replenish the set as well as an enormous, the problem will be from the economic recession. “
Abe figures mentioned by the bank report of international report, who said the Stor’s home debt report from the second of the second. In the family debt in the other advanced points at 68.9% on average.
For comparison, Data from International Monetary Fund showed the country to have the highest home debt at the GDP ratio between Asian countries in 2023, at 93.54.
China, Asia economy, had a ratio of 63.67, while India was 39.16. Japan had a ratio of 65.66 in 2023.
Abe also told the debt ratio to the 186% income in the 2023 in South Korea, having beautiful of 138.
The data displays that the speed of debt is faster than the ascent and SCSP, involving the Korean economy, depends on the debt, ABE told.
“In a case where the sector will not run out of shocks will be enormous, that will not be limited in the sector and financial sector will be in catastron. So, the Authority Koreans need to reduce such risks before, added.
Book Dilema
Bok makes a difficult walk. I need to cut the rates as to stimulate iron economy and relieve the debt server, but a short rate of weak rate I would have to demonstrate imported information.
More important, endowsus’ rhee said a fare tact of rate could score a potential question for the homes, carrying on a acceleration in exception.
“If the lower interest rates and this is used to stimulate the housing request, which makes the hotel prices and the rental prices
Alex Holmes, research manager for Asia at the intelligent’s economist unit has told CNBC “Asia of the Squawk box“First in January 2024 was the first year that the debt went to the percent of pike, and the BOK I don’t want to cut rates to prevent a refund.
