Commissioner Hwang Geon-il of the Bank of Korea's Monetary Policy Committee said on the 27th, "Close policy coordination for macroprudential management is crucial to ensure that the real estate market and household debt situation do not constrain the conduct of monetary policy aimed at alleviating downward pressure on the economy."

On the same day, Commissioner Hwang noted through the subjective committee message included in the 'Financial Stability Report (March 2025)' published by the Bank of Korea that "it is important to be aware of the rapid rise in housing prices in certain areas of Seoul spreading to other regions."

Newly appointed Monetary Policy Committee Commissioner Hwang Geon-il is delivering an inaugural speech at the appointment ceremony held at the Bank of Korea in Jung-gu, Seoul on Feb. 13, 2022. /Courtesy of News1

He mentioned regarding the country's financial system that "it generally maintains a stable appearance based on the resilience of sound financial institutions and the ability to pay external debts," adding, "the household debt ratio is approaching 90% of gross domestic product (GDP) and continues to stabilize downwards, while the ratio of real estate financial exposure also turned to a decline at the end of last year after steadily rising."

However, he also mentioned points of concern. Commissioner Hwang stated, "There is a possibility that the volatility of price variables in the financial and foreign exchange markets could expand in the event of internal or external shocks," and added, "While the repayment burden of borrowers will gradually decrease due to relaxed financial conditions, there are concerns that the soundness of some local and non-bank financial institutions could deteriorate as the number of failures in vulnerable sectors, such as self-employed individuals and small and medium-sized enterprises, increases."

Commissioner Hwang emphasized, "To effectively respond to risks in a highly uncertain environment, it is essential to proactively strengthen the soundness management of vulnerable sectors while continuing efforts for structural reform to increase potential growth rates."

He also stated, "In particular, care should be taken to ensure that the easing of financial conditions under a trend of lowering interest rates does not delay or constrain structural reforms in vulnerable sectors."