SEOUL, June 13 (Xinhua) -- The Republic of Korea's new top economic policymaker on Tuesday signaled a crackdown on the speculative investment into real estate as household debts kept a record-breaking trend for home purchases with borrowed money.
Finance Minister Kim Dong-yeon, who doubles as the deputy prime minister for economic affairs, chaired his first meeting with ministers to discuss economic situations since he took office last Friday.
Kim said he was closely watching an abnormal exuberance at the real estate market in Seoul and some of regions, vowing never to look on idly with the speculative property investment.
The joint inspection team of ministries would conduct the strongest-ever inspection of the areas showing signs of the speculative investment to punish any wrongdoings in the real estate market.
Some market watchers worried that bubble might have been formed in the real estate market as households rushed to purchase new homes with borrowed money.
Household debts kept a record-breaking trend as the financial regulator eased regulations on mortgage financing amid the record-low borrowing costs.
The Bank of Korea (BOK) cut its benchmark interest rate from 3.25 percent in July 2012 to an all-time low of 1.25 percent in June last year.
BOK Governor Lee Ju-yeol recently signaled the tightening of monetary policy when a recovery trend gets clearer.
To prevent the possible bubble burst, the government planned to deal selectively with speculative investments and provide financial assistance to those who buy home for the residence purpose.
The new finance minister saw a high possibility for the U.S. Federal Reserve's interest rate hike in the near future, saying his ministry would prepare for market stabilization measures in response to the possible rate increase.
The Fed raised its policy rate to a range of 0.75-1.00 percent, coming closer to the BOK's benchmark rate of 1.25 percent.
The U.S. central bank's one more hike may trigger foreign capital exodus from the The Republic of Korean financial market. Enditem
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