Seoul: The central bank chief said Tuesday that interest rate policy alone cannot control real estate prices, and the bank seeks to stabilize the housing market by preventing an oversupply of liquidity. Bank of Korea (BOK) Gov. Rhee Chang-yong made the remarks during a lecture at Seoul National University, as the central bank held its key rate steady for the second consecutive time during a rate-setting meeting late last month amid persistent concerns about rising housing prices and household debt.

According to Yonhap News Agency, Rhee emphasized the limited impact of delaying a rate cut by a month or two on the economy. He warned that if housing prices in Seoul rise in response to a rate-cut signal, the situation could become more challenging. “We would not fuel the real estate market through liquidity supply,” Rhee stated.

The central bank initiated its monetary easing cycle in October and has since reduced the key interest rate by a cumulative 100 basis points, with the latest reduction occurring in May. While the BOK acknowledges the need to lower key rates to support the struggling economy, it also underscores the trade-off between maintaining financial stability and promoting growth.

Rhee also addressed the topic of a won-denominated stablecoin, advocating for a cautious approach due to potential risks to the monetary system. He remarked, “Creating a won-based stablecoin does not prevent the penetration of dollar-denominated ones. Some say that issuing a stablecoin first would make us a ‘Stablecoin G2,’ but it is just fear-mongering.”