South Korean Presidential Office expresses regret over Bank of Korea's interest rate freeze, sparking controversy over undermining monetary policy independence

The South Korean presidential office's expression of regret over the Bank of Korea's decision to freeze the benchmark interest rate has sparked a new debate over the independence of monetary policy.
The president's office responded by saying that there was no problem because the market had already taken the October base interest rate cut as a foregone conclusion.
On the 22nd, the Presidential Office made an unusually disappointing statement in response to the Bank of Korea's announcement that it would freeze the base interest rate at 3.50%, pointing out the problem of sluggish domestic demand.
The bank has frozen its base interest rate for three consecutive times, the longest period since its establishment. The ruling party also agreed with the government's opinion. Yoon Sang Hyun, a lawmaker from the ruling People Power Party, posted on social media, "The real estate
"Although the measure takes into consideration prices and household debt, the Bank of Korea, which should be immediately responding to the economic downturn and expanding domestic demand, is shrinking excessively," he said, criticizing the move, saying, "It is extremely regrettable."
He added, "Property prices should be addressed through real estate measures, not through benchmark interest rates."
The Presidential Office and the political world have directly protested the interest rate decision made by the Monetary and Monetary Affairs Committee of the Bank of Korea, whose independence is guaranteed.
The President's Office has been criticized for undermining its independence by pointing out the committee's decision. A financial industry source who requested anonymity said, "Lowering interest rates will not immediately stabilize consumption.
"It is not a good stance for the President's Office to interfere in the Bank of Korea's decision," said a professor of economics. "In fact, a freeze is the right answer in the current economic situation, and the President should take the lead."
"I wonder whether such a statement by the office itself is appropriate," he said. The presidential office responded by saying it was "unfortunate" because the October base interest rate cut was a foregone conclusion in the market.
The committee explained that the evaluation of the committee will not undermine its independence. A senior official in the presidential office said in an interview with the Korean media outlet Herald Business that the committee's independence debate will be decided based on the following:
The decision will be made in October, and the market is probably already expecting a 100% cut. Even if he expresses regret, it will not affect the decision in October at all."
He continued, "Since measures to boost consumer prices and domestic demand to promote consumption are scheduled to be announced next week for the mid-autumn celebration, the government believes that lowering interest rates would create a synergistic effect."
Meanwhile, Bank of Korea Governor Lee Chang-yong said at a press conference on the same day, "The current situation can be interpreted and evaluated in various ways depending on which aspect you look at."
"Given the current situation, it is natural that people have different opinions about us," he explained. "We will comprehensively evaluate those opinions and then make an internal decision."
"If someone makes the decision after seeing my press conference that an interest rate cut in October is certain, that is the opinion of the person himself and those who see it that way.
It's just an interpretation," he added.