On the 12th, Bank of Korea Governor Shin Hyun-Song said, “There is a need to raise interest rates without delay, with a focus on price stability.”

At the BOK 76th-anniversary ceremony held that day at the central bank’s annex in Jung-gu, Seoul, he said, “Conditions for growth, prices, and financial stability are, from a monetary policy perspective, pointing in a fairly clear single direction.”

He added, “Data obtained since the May meeting on the direction of monetary policy also confirm this,” and, “Monetary policy is bound to face trade-offs among policy variables, but those trade-offs are not large at present.”

He emphasized, “Because the burden of rising prices falls relatively more heavily on low-income groups, preemptive efforts at price stability (such as interest rate hikes) are also a way to prevent their burdens from intensifying.”

After the Monetary Policy Board meeting in May, Governor Shin had also signaled a base-rate hike, saying, “The path ahead is clear.” With his mention of the timing as “not too late” today, there is speculation that a base-rate hike will be decided at the next Monetary Policy Board meeting scheduled for July 16.

He expressed concern that rate hikes could increase the debt-servicing burden of companies and households, but said, “Targeted support for these difficulties is more effective through fiscal policy,” adding, “The BOK should also consider whether there is any role it can play in this regard.”

Regarding housing prices, he said, “In the Seoul metropolitan housing market, strong increases in both sale prices and jeonse and monthly rents continue, and expectations for further rises have increased again,” and, “Over the medium to long term, efforts must continue to ease concentration in the capital region and to channel funds toward productive sectors.”

On stock-market ‘bit-tu’ (borrowing to invest), he noted, “Excessive leverage (borrowing) can not only have a large impact on individual gains and losses when prices correct, but can also amplify market volatility, and investors should be mindful of this.”

As for the won·dollar exchange rate, which has recently risen into the 1,500-won range, he projected that it will gradually stabilize. He said, “In the market, the large current-account surplus is seen as increasing demand for the won via corporate tax payments and expanded domestic investment, and thus the won·dollar rate is expected to gradually stabilize going forward,” adding, “By opening the FX market 24 hours and building an offshore won settlement system, we will work with relevant institutions to improve foreign investors’ access to the won market and to draw demand for non-deliverable forward (NDF) trading onshore.”..