ID :
61709
Thu, 05/21/2009 - 18:55
Auther :
Shortlink :
https://www.oananews.org//node/61709
The shortlink copeid
S. Korea`s liquidity not excessive: central bank
(ATTN: RECASTS headline, lead; ADDS more details, backgrounds from para 2)
SEOUL, May 21 (Yonhap) -- South Korea's liquidity is not excessive enough to
trigger serious side effects such as escalating inflationary pressure and an
asset bubble, the central bank said Thursday.
The assessment by the Bank of Korea (BOK) comes in response to growing market
worries that excess liquidity, caused by the central bank's soft monetary policy,
will push up consumer prices and cause asset inflation down the road.
"Liquidity is not ample enough to spark any considerable negative effects as its
growth is currently not seen as putting upward pressure on inflation and other
asset prices," the BOK said in a statement.
"But there is a need to keep tabs on the movement of short-term floating money
into the real estate market because housing prices could sharply rise if
home-backed loans jump," it said.
Some market watcher say the country's liquidity has reached an excessive level
because of the central bank's rate cuts in late 2008 and early this year, raising
concern over a bubble and speculation in stocks and properties.
But others dismiss such worries, saying the country's liquidity level is not
excessive at the moment.
In a bid to bolster the slumping economy, the BOK made six interest rate cuts
between October and February, dragging the country's benchmark repo rate to a
record low of 2 percent from 5.25 percent.
The rate cuts have lead to a rise in the amount of cash hopping in and out of
investments in search of higher returns. The so-called short-term floating funds
amounted to 811.3 trillion won (US$650.9 billion) at the end of last month,
according to the government and the BOK.
But the government and the central bank shrug off such woes, saying that they
would keep their expansionary fiscal and monetary policies due to economic
uncertainty.
After a rate-setting meeting in May, BOK Gov. Lee Seong-tae said it is too early
to talk about absorbing liquidity that authorities have supplied into the market,
adding that the bank will maintain an easing stance for the time being.
sooyeon@yna.co.kr
(END)
SEOUL, May 21 (Yonhap) -- South Korea's liquidity is not excessive enough to
trigger serious side effects such as escalating inflationary pressure and an
asset bubble, the central bank said Thursday.
The assessment by the Bank of Korea (BOK) comes in response to growing market
worries that excess liquidity, caused by the central bank's soft monetary policy,
will push up consumer prices and cause asset inflation down the road.
"Liquidity is not ample enough to spark any considerable negative effects as its
growth is currently not seen as putting upward pressure on inflation and other
asset prices," the BOK said in a statement.
"But there is a need to keep tabs on the movement of short-term floating money
into the real estate market because housing prices could sharply rise if
home-backed loans jump," it said.
Some market watcher say the country's liquidity has reached an excessive level
because of the central bank's rate cuts in late 2008 and early this year, raising
concern over a bubble and speculation in stocks and properties.
But others dismiss such worries, saying the country's liquidity level is not
excessive at the moment.
In a bid to bolster the slumping economy, the BOK made six interest rate cuts
between October and February, dragging the country's benchmark repo rate to a
record low of 2 percent from 5.25 percent.
The rate cuts have lead to a rise in the amount of cash hopping in and out of
investments in search of higher returns. The so-called short-term floating funds
amounted to 811.3 trillion won (US$650.9 billion) at the end of last month,
according to the government and the BOK.
But the government and the central bank shrug off such woes, saying that they
would keep their expansionary fiscal and monetary policies due to economic
uncertainty.
After a rate-setting meeting in May, BOK Gov. Lee Seong-tae said it is too early
to talk about absorbing liquidity that authorities have supplied into the market,
adding that the bank will maintain an easing stance for the time being.
sooyeon@yna.co.kr
(END)
