Increased liquidity is not the sole factor behind the recent surge in housing prices in the Seoul metropolitan area or the weakness of the local currency, the Bank of Korea (BOK) said Tuesday, stressing that monetary policy alone is not sufficient to fully control an increase in loans. In a blog post, the central bank rejected claims that recent "excessive" liquidity has fueled rising home prices and weakened the Korean won against the U.S. dollar. "There are various factors affecting housing prices and the exchange rate, and it is unreasonable to attribute them solely to an increase in liquidity," the BOK said. "Although M2 has risen in recent months, the increase is not unusual." The central bank noted that the increase in liquidity stemmed from four policy rate cuts during the current easing cycle that began last year, which have affected private credit with a time lag, as well as a recent expansion in the current account surplus. Higher government bond issuance driven by increased fiscal spending was also cited as a contributing factor. "Compared with past easing cycles, however, the