Advertisement
When should a housing society in Mumbai start considering re...
From GST on JDAs to SEBI’s REIT reclassification and the S...
Stay ahead in the world of real estate with our daily podcas...
Stay ahead in the world of real estate with our daily podcas...
South Korea's Central Bank has clarified that excessive domestic liquidity alone is not behind the recent weakening of the won or rising residential property prices. The Bank of Korea (BOK) pointed to factors like increased overseas securities investment by residents and export companies holding foreign currency as having a stronger influence on the currency. The bank highlighted that past liquidity accumulation has been feeding into the housing market rather than fresh money supply. It has also taken steps to stabilise the won, including extending a currency swap agreement with the National Pension Service.
South Korea's Central Bank indicated that it would be an overstatement to attribute the recent weakening of the won and surging residential property prices solely to high liquidity in the domestic market. The Bank of Korea noted that other factors, including increased overseas securities investments by local residents and export firms tendencies to retain foreign currency, are exerting a stronger influence on the exchange rate than domestic liquidity levels. Advertisement
The BOK highlighted that much of the liquidity affecting property prices comes from funds accumulated over previous years, rather than new money entering the system. This accumulated liquidity has been contributing to rising housing prices, particularly in Seoul, where property values have remained elevated.
The Central Bank maintained its interest rates unchanged for the fourth consecutive meeting in late November, citing the won's decline as a limiting factor for further easing. Persistently high property prices and the resulting financial stability risks have also played a role in the BOK's cautious approach.
To counter the won's weakness, currently at a 16-year low, the BOK has extended a currency swap agreement with the National Pension Service for another year. This move aims to stabilise the dollar-won rate by reducing selling pressure on the local currency and supporting market confidence.
Source Reuters
5th Jun, 2025
25th May, 2023
11th May, 2023
27th Apr, 2023
Advertisement
Facebook
Whatsapp
