Bank of Korea chief sees warning signs of sustained higher interest rates

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Bank of Korea chief sees warning signs of sustained higher interest rates

Monday, Rhee Chang-yong, the governor of the Bank of Korea, said that recent market worries about a financially troubled builder are a “warning sign” about the financial risks of keeping interest rates low for a long time.

In a New Year speech, Rhee said that while controlling inflation is still the most important thing, it is also important to find the right mix of policies because South Korea is almost done with its long fight to keep consumer prices low.

Read more: Fasten your seat belts! The head of the IMF says interest rates will stay the same for a while longer.

There were concerns about the reliability of commercial real estate loans in major countries, and a medium-sized local developer had to restructure its large amount of debt. These were two signs that the economy was in trouble.

“There is a need to be thoroughly prepared for the possibility of financial instability that can arise as tightened policy continues,” he stated.

“We need to pay particular attention to make sure credit risks do not grow around what is a weak link in our economy.”

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