SEOUL: South Korea’s central financial institution stated on Tuesday (Dec 16) it might be an “overstatement” in charge ample liquidity situations within the home marketplace for a weaker received foreign money and value upswings within the residential property market.
“Looking at exchange rates, it appears that factors such as increased overseas securities investment by residents and the tendency of export companies to hold foreign currency are having a greater impact than liquidity conditions,” the Bank of Korea stated in a report.
The BOK additionally stated an accumulation of liquidity from the previous has been flowing into the native property market and boosting costs, reasonably than recent cash provide.
Tuesday’s report comes because the financial institution stored rates of interest unchanged for a fourth straight assembly in late November as a tumbling received decreased the scope for additional easing, amid rising monetary stability dangers from persistent housing value good points in Seoul.
According to the BOK, home liquidity situations don’t warrant the alarm raised by some commentators who think about that extreme liquidity is in charge for a weaker received and asset value inflation.
The BOK has been taking measures to curb the decline within the received, which is at present hovering at a 16-year low, by extending a foreign money swap settlement with the National Pension Service for an additional yr, a measure geared toward stabilising the dollar-won charge by easing promoting strain on the foreign money.