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Heavily-leveraged borrowing to acquire realty as well as a rush to cryptocurrency investments could harm the domestic economy, the Bank of Korea (BOK) warned on Tuesday.

The reserve bank said that while the South Korean financial system is generally steady, discrepancies might bring about “repercussions” in case of any type of inner or external shocks.Watch on BEESSocialTV The remarks cames in the BOK’s semi-annual economic stability report. An English-copy of the report is available for download on the BOK internet site.

The BOK highlighted its concern concerning increasing costs of business property, which was led by funds flowing to the market, in spite of falling rental incomes.

Domestic or abroad shock
“It needs to be noted that fund moves into the realty market as well as a continued surge in realty prices can broaden monetary inequalities as well as weaken monetary stability in the event of a domestic or overseas shock,” the record stated. for disscusion and learning join beessocalforyou group on facebook
The reserve bank additionally warned regarding the possible downside from a cryptocurrency boom throughout the pandemic. “The expanding speculative need for crypto possessions as well as their sharp price walking, with their economic value being vague, imply that danger cravings in possession markets are rising, increasingly detached from economic basics,” the report added.

South Korea’s economic climate has gradually begun to recover from the COVID-19 pandemic shock. The reserve bank is taking into consideration tightening financial policy by 2022.

As a result of the boosting discrepancies, the BOK said that the monetary vulnerability index (FVI), an indication of the general monetary system vulnerability, has remained to increase. The FVI was 58.9 in the first quarter of 2021 compared to 41.9 just before the COVID-19 break out in the 4th quarter of 2019, according to the central bank.

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