Bank of Korea Monetary Policy Committee and Interest Rate Freeze: Key Points

1. Economic Growth and Reasons for Rate Freeze

Downside Risks to Economic Growth: The Korean economy is stated to be in a downturn.
Reasons Against Interest Rate Cuts:
1. Exchange Rate Risk Concerns: Potential for won depreciation and exchange rate instability if rates are lowered.
2. Political Risks: Domestic and international political uncertainties are expected to impact exchange rates and economic stability.
Summary of Governor's Remarks:
- While it might be appropriate to lower interest rates based solely on the Korean economy, the decision was made to freeze rates after considering other factors.

2. Small Business Owners and Interest Rate Policy

Small Business Issues:
- Regarding the argument to lower interest rates to alleviate the difficulties of small business owners, the governor stated that "a tailored policy directly supporting a specific group (small business owners) is more suitable than an interest rate policy that affects all citizens equally."
Preference for Targeted Policies:
- The stance is that support measures aimed at specific economic actors are more appropriate than adjusting interest rates.

3. Timing of Rate Cuts and Future Response

Refuting Claims of Missed Rate Cut Timing:
- "Our economic growth rate is gradually decreasing. Interest rate cuts alone cannot solve all problems."
- Emphasis on exploring new response measures suitable for an era of low growth.
Potential Growth Rate:
- The need to face the long-term decline in Korea's growth rate and discuss economic response measures from a long-term perspective.

4. Exchange Rates and National Pension Fund Controversy

Exchange Rate Instability:
- The claim that if political risks were removed, the exchange rate could be at a more stable level (e.g., 1,300 won).
National Pension Fund Foreign Exchange Intervention Controversy:
- The explanation that the National Pension Fund only "realized unrealized gains" through foreign exchange market intervention, and negative interpretations are misunderstandings.

5. Comparison of the Korean Economy with Global Conditions

Not Just a Korean Problem:
- Many countries are experiencing difficulties in the global environment, and only certain markets like US stocks are relatively performing well.
US vs. Other Regions:
- Global capital invested in the US has increased, but other major countries (Europe, Japan, etc.) have not benefited equally.

6. Additional Policies from the Bank of Korea

Expanded Support for SMEs:
- While interest rates were frozen, the Bank of Korea announced a special support package (5 trillion won expansion) for SMEs.
Global Currency Supply Increase:
- Major countries, including China, are implementing unprecedented currency supply increase policies.

7. Individuals and Investment

Response to Currency Supply Increase:
- It is crucial for individuals to establish thorough asset management and investment plans amid the increasing global currency supply.

< Summary in English >
1. Economic Growth Concerns and Rate Freeze:

The Bank of Korea emphasized rising downside risks to economic growth. While a rate cut might seem logical, concerns over exchange rate stability and political uncertainties hold significant weight.

2. Support for Small Business vs. Broad Policies:

A tailored policy approach, directly aiding struggling small business owners, was highlighted as a more effective alternative.

3. Timing of Rate Cuts:

South Korea faces a low-growth future, and monetary policy alone cannot resolve structural challenges.

4. Managing FX and Pension Funds:

Concerns around foreign exchange volatility and the Korean pension fund's involvement were clarified. Misunderstandings about "market manipulation" were addressed.

5. Global Context:

Other countries are also facing economic struggles, and South Korea's situation is not isolated.

6. Additional BOI Policies:

A KRW₩5 trillion support plan for SMEs was announced alongside the rate freeze.

7. Individual Investment Focus:

With global liquidity increasing, individuals need to safeguard purchasing power through informed asset diversification and investment strategies.

Crafted by Billy Yang
[Related Articles at Next-Korea.com]
1. New Support Policies for Korean Small Business Owners
2. 2023 Exchange Rate Outlook and Economic Response Strategies

*YouTube Source: [이효석아카데미]

– [속보효] 한은총재 작심발언 “난 틀리지 않았다”

[Korean Summary]

[이효석아카데미]
“[속보효] 한은총재 작심발언 “난 틀리지 않았다”“

# 한국은행 금통위와 금리 동결: 주요 내용 정리

1. 경제 성장과 금리 동결 이유

경제 성장 하방 위험: 한국 경제가 하강 국면에 있다고 밝힘.
금리 인하 불가 이유:
1. 환율 리스크 우려: 금리 인하 시 원화 약세로 인한 환율 불안 가능성.
2. 정치적 리스크: 국내외 정치적 불확실성이 환율과 경제 안정에 영향을 미칠 것으로 예상.
총재 발언 요약:
- 한국 경제만 보면 금리를 내리는 것이 맞을 수도 있지만, 다른 요인들을 종합적으로 고려해 동결을 결정.

2. 자영업자와 금리 정책

자영업자 문제:
- 자영업자의 어려움을 덜기 위해 금리를 내리자는 의견에 대해 총재는 "모든 국민에게 동일하게 영향을 미칠 금리 정책보다 특정 그룹(자영업자)을 직접 지원하는 맞춤형 정책이 더 적합하다"고 발언.
핀셋 정책 선호:
- 금리 조정보다는 특정 경제주체를 대상으로 한 지원책이 적합하다는 입장.

3. 금리 인하 타이밍과 미래 대응

금리 인하 실기론 반박:
- "우리 경제 성장률은 점진적으로 낮아지고 있음. 금리 인하만으로 모든 문제를 해결할 수는 없다."
- 저성장 시대에 맞는 새로운 대응 방안을 모색해야 한다고 강조.
잠재적 성장률:
- 한국의 장기적인 성장률 하락 추세를 직시하고, 경제 대응책도 장기적 관점에서 논의해야 함.

4. 환율과 국민연금 논란

환율 불안 상황:
- 정치적 리스크가 제거된다면 환율이 현재보다는 안정적인 수준(예: 1300원)일 수 있었다는 주장.
국민연금 외환 개입 논란:
- 국민연금이 외환시장 개입을 통해 "미실현 수익을 실현한 것"에 불과하며, 일부에서 제기하는 부정적 해석은 오해라는 설명.

5. 한국 경제와 글로벌 상황 비교

한국 경제만의 문제 아님:
- 글로벌 환경에서도 다수의 국가가 어려움을 겪고 있으며, 미국 주식 등 특정 시장만 상대적으로 선전.
미국과 기타 지역:
- 미국으로 투자된 글로벌 자금은 증가했으나, 다른 주요국(유럽, 일본 등)은 동일한 혜택을 누리지 못함.

6. 한국은행의 추가 정책

중소기업 지원 확대:
- 한국은행은 금리를 동결했지만, 중소·기업을 위한 특별 지원책(5조원 확대) 발표.
글로벌 통화량 증가:
- 중국을 포함한 주요국에서 역대급 통화량 증대 정책 실행 중.

7. 개인과 투자

통화량 증가 대비:
- 증가하는 글로벌 통화량 상황 속에서 개인들은 자산 운용과 투자 대책을 철저히 세우는 것이 중요.

< Summary in English >
1. Economic Growth Concerns and Rate Freeze:

The Bank of Korea emphasized rising downside risks to economic growth. While a rate cut might seem logical, concerns over exchange rate stability and political uncertainties hold significant weight.

2. Support for Small Business vs. Broad Policies:

A tailored policy approach, directly aiding struggling small business owners, was highlighted as a more effective alternative.

3. Timing of Rate Cuts:

South Korea faces a low-growth future, and monetary policy alone cannot resolve structural challenges.

4. Managing FX and Pension Funds:

Concerns around foreign exchange volatility and the Korean pension fund's involvement were clarified. Misunderstandings about "market manipulation" were addressed.

5. Global Context: