Policy chief says high rates, prices, exchange rate are ‘cost of success’ in economic leap forward

“The presidential policy chief assessed that the Korean economy is taking a leap forward, brushing aside concerns over a triple burden of costly borrowing rates, high prices and a weak Korean won, calling them instead the “cost of success.” In a Facebook post titled “The cost of success,” Saturday, Kim Yong-beom, presidential chief of staff for policy, said these three factors are not “a precursor to crisis, but friction emerging as the Korean economy enters a new phase.” “While corporate performance is at an all-time high, interest rates and the exchange rate are rising, and housing prices are starting to heat up again, with markets and the public raising concerns about a crisis,” he said. “The problem lies not in the economy itself, but in the framework through which it is perceived,” he added. Kim’s post came as the lower bound of fixed mortgage rates at major commercial banks bounced back above 5 percent, while the benchmark interest rate remains unchanged at 2.5 percent since May last year. The Korean won is weakening against the U.S. dollar, with the exchange ra

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