Overview

• After four rate cuts since October, the Bank of Korea held its benchmark rate at 2.5% in June to safeguard financial stability.
• Household loans extended by local banks rose for a fourth consecutive month through May, marking the largest monthly gain since September 2024.
• Deputy Governor Ryoo Sang-dai warned that heavy capital concentration in real estate undermines productivity and drags down the nation’s potential growth.
• Board member Kim Jong-hwa called for tight coordination with government policies to mitigate housing market and debt-related stability risks.
• South Korea’s potential growth rate, currently around 2%, faces further decline due to a low birthrate and an aging population.