South Korea's Financial Supervisory Service chief warns against keeping interest rates unchanged for too long

On the 30th, Lee Bok-hyun, head of the Financial Supervisory Service, held a meeting to review the financial situation and warned about the volatility of interest rates and the stock market. He also inspected the state of corporate fund-raising and warned about the liquidity of the stock market.
At a meeting held at the Financial Supervisory Service after the Federal Open Market Committee (FOMC) meeting on the same day, Lee said, "The Federal Reserve (Fed) has increased its monetary policy as expected by the market.
"Although the Bank kept interest rates unchanged, it signaled concerns about a resurgence of inflation and indicated it was in no hurry to cut interest rates, meaning that the current high interest rates may continue for longer than expected."
Li also said he expects growing uncertainty to continue through the first half of the year. If there are inflationary pressures, the Federal Reserve may raise interest rates, which could lead to a rise in interest rates.
He also pointed out that interest rate volatility needs to be taken into consideration. In addition, the Trade Practices Review Report is scheduled to be released in the United States in April, which is expected to provide a clear indication of the tone of the Trump administration's trade policy.
Li said, "We will strengthen analysis of the impact on industries and companies that are sensitive to the Trump administration's policy changes, such as industrial subsidies and tariffs, and proactively work with relevant agencies to provide necessary support."
" He also mentioned the volatility of the stock market, saying that the emergence of low-cost artificial intelligence (AI) such as Deepseek has raised concerns about the high valuations of Big Tech stocks in the United States, and that stock prices have fallen.
"The AI market is likely to be shaken up," he said, adding that the industry structure will also see major changes, so it is important to keep a close eye on related trends.
In addition, the government will encourage financial institutions to set aside sufficient reserves at the time of the fiscal year ending in 2024, and will provide a mechanism for providing funds to deal with the slump in domestic demand and the stagnation of the real estate market.
They called for strengthening financial management to prevent the company's capabilities from shrinking.