S. Korea vows to curb household debt risks

South Korea’s incoming head financial regulator has pledged to closely monitor and manage risks associated with household debt as the country’s real estate market shows signs of recovery boosting expectations for interest rate cuts.

“Especially, with regard to household debt, we will thoroughly manage by preparing a meticulous contingency plan to prevent risks from expanding,” said Kim Byoung-hwan, the chairman of the Financial Services Commission, who took up his new role at the agency this week.

Last month, South Korea’s housing market experienced a resurgence for the first time in seven months, with Seoul home prices surging at their fastest pace in two and a half years.

Minutes from the Bank of Korea’s (BOK) latest policy meeting revealed a division among board members regarding the timing of interest rate cuts. A majority expressed concerns that lower borrowing costs could fuel further increases in housing prices.

Attribution: Reuters