South Korea to swiftly introduce measures supporting vulnerable borrowers

South Korean Deputy Prime Minister and Minister of Economy and Finance, Koo Yun-cheol, pledged to promptly unveil a support plan for vulnerable borrowers struggling with rising interest rates. The announcement came during a market situation review meeting held in Seoul.

Koo identified the surge in long-term government bond yields in major economies and the domestic bond market as key factors increasing the debt burden for households and self-employed individuals. He stated that the government would "prepare and promptly announce a 'vulnerable borrower support plan' to ease the debt burden of small business owners and low-income/vulnerable borrowers." The plan includes measures to activate debt restructuring and expand financial support for small and medium-sized enterprises, as well as low-income and vulnerable borrowers.

Addressing the recent fluctuation in the won-dollar exchange rate, which returned to the 1300 won level after briefly exceeding 1550 won, Koo indicated that the government would maintain a high level of vigilance and respond to market volatility, acknowledging the presence of factors influencing both upward and downward movements. He also commented on household debt, noting that while the total amount has increased, its ratio to GDP has actually decreased in the first quarter, standing at 85.3%. However, he acknowledged that this ratio remains high compared to other major economies and pledged continued management efforts while ensuring access to financing for genuine homebuyers.

The meeting included Financial Services Commission Chairman Lee Eok-won, Financial Supervisory Service Governor Lee Chan-jin, and Bank of Korea Deputy Governor Park Jong-woo.