Industry jitters spread over the Bank of Korea’s signal of a rate hike this year
The Bank of Korea has signaled that it may raise its benchmark interest rate this year. The industry says the burden of high interest rates has been added to the pressures of a weak currency and high oil prices, and expects interest-rate-sensitive sectors to take a bigger hit.
The Bank of Korea has signaled that it may raise its benchmark interest rate this year. Since the remarks, jitters have spread across the industry. Companies say high interest rates have added to the existing burden of a weak currency and high oil prices.
The industry expects a rate hike to increase companies’ financing costs. Some say sectors sensitive to changes in demand could be affected more severely. They noted that economically sensitive sectors are vulnerable to shifts in financing conditions and consumer sentiment resulting from interest-rate changes.
Company officials said they are already managing existing risks. They expressed concern that interest-rate risk has been added to a situation already affected by a weak currency and high oil prices. Some companies said they are reviewing their cost structures and investment plans.
The industry said that interest-rate signals directly affect financing costs and investment decisions. Companies said they are reviewing loan maturities and interest burdens. The industry is closely monitoring interest-rate trends.
The need for responses from the government and the financial sector in connection with this announcement was mentioned. The industry said that other external factors besides interest rates are also having a complex impact. Companies are reviewing both their immediate cash flow and medium- to long-term funding plans.
Sources: 연합뉴스 경제
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