SEOUL : South Korea’s central bank said on Monday there was a need to manage financial stability in addition to price risks as the country’s high household debts have started to climb.
“In terms of monetary policy, it should consider financial stability more actively to prevent excessive leveraging or risky asset investments when monetary policy is loose,” the Bank of Korea (BOK) said in a report.
“There is a need to discuss introducing a ‘prudential monetary policy’ with higher consideration on financial stability, in addition to price stability,” the central bank said.
South Korea’s household debt surged to a record high in June, when it increased for a third month and by the biggest amount in 21 months, as demand grew for mortgage loans, data showed last week.
Total household debt stood at 105.0 per cent of the country’s gross domestic product in the fourth quarter of 2022, the third highest after Switzerland and Australia,…
