The Korea Times close
National
  • Politics
  • Foreign Affairs
  • Multicultural Community
  • Defense
  • Environment & Animals
  • Law & Crime
  • Society
  • Health & Science
Business
  • Tech
  • Bio
  • Companies
Finance
  • Companies
  • Economy
  • Markets
  • Cryptocurrency
Opinion
  • Editorial
  • Columns
  • Thoughts of the Times
  • Cartoon
  • Today in History
  • Blogs
  • Tribune Service
  • Blondie & Garfield
  • Letter to President
  • Letter to the Editor
Lifestyle
  • Travel & Food
  • Trends
  • People & Events
  • Books
  • Around Town
  • Fortune Telling
Entertainment
& Arts
  • K-pop
  • Films
  • Shows & Dramas
  • Music
  • Theater & Others
Sports
World
  • SCMP
  • Asia
Video
  • Culture
  • People
  • News
Photos
  • Photo News
  • Darkroom
  • The Korea Times
  • search
  • Site Map
  • E-paper
  • Subscribe
  • Register
  • LogIn
search close
  • The Korea Times
  • search
  • Site Map
  • E-paper
  • Subscribe
  • Register
  • LogIn
search close
Finance
  • Companies
  • Economy
  • Markets
  • Cryptocurrency
Sat, August 13, 2022 | 17:26
Economy
Bank of Korea chief leaves door open for additional rate hikes
Posted : 2022-01-14 16:24
Updated : 2022-01-14 16:36
Print Preview
Font Size Up
Font Size Down
Bank of Korea Governor Lee Ju-yeol speaks during a press conference in Seoul, Friday, after holding a monetary policy board meeting when the central bank decided to increase the key rate to 1.25 percent. Courtesy of Bank of Korea
Bank of Korea Governor Lee Ju-yeol speaks during a press conference in Seoul, Friday, after holding a monetary policy board meeting when the central bank decided to increase the key rate to 1.25 percent. Courtesy of Bank of Korea

'Monetary policy still accommodative despite three rate hikes'

By Lee Min-hyung

Bank of Korea (BOK) Governor Lee Ju-yeol hinted Friday that the central bank will continue to hike interest rates in the months to come in a bid to reduce risks on widening financial imbalance and escalating inflationary pressure.

The message came later in the day after the central bank raised the key rate by 25 basis points to 1.25 percent during a monetary policy board meeting. The BOK also underscored the need to increase it further in accordance with economic circumstances here and abroad.

Seoul stocks dip for 2nd day on rate hike concerns
Seoul stocks dip for 2nd day on rate hike concerns
2022-01-14 16:50  |  Markets

"We still consider the monetary policy accommodative," Lee told reporters during an online press conference. "Even if we raise the benchmark rate once more to 1.5 percent, Korea's monetary policy is not in a contractionary level."

Early in the COVID-19 pandemic, the BOK cut the base rate to a record low of 0.5 percent in May 2020, but started increasing it from August 2021, citing growing risks on prolonged financial imbalance and rapid inflationary pressures. The current 1.25 percent key rate is on par with the pre-pandemic level.

According to a statement released by the BOK monetary board, Korea's consumer price inflation will come up to the mid-3 percent range in the next few months, and the figure is estimated to average mid-2 percent for the year .

But the hawkish monetary policy raises concerns over a possible drop in Korea's 2022 GDP growth at a time when the economy is still grappling with the unceasing spread of the coronavirus and its variants. The government is also reinforcing rules on social distancing, which is feared to put a damper on domestic consumption and overall economic recovery here.

Despite such worries, Lee reiterated the bank's willingness to place more focus on stabilizing price levels and financial risks.

"When operating monetary policies, our priority is how to manage risks on financial stability, inflation and economic conditions, even if the BOK also takes into consideration structural issues ― such as the potential drop in the GDP growth," he said.

Regarding the expiration of the Korea-U.S. currency swap deal, the BOK said it does not have any immediate plans to sign a new swap agreement with the world's largest economy. The two countries signed the $60 billion (71.2 trillion won) currency swap deal in March 2020 shortly after the pandemic began, but reached a consensus not to extend further after it expired at the end of 2021.

"The financial market has been stabilizing at a rapid pace after March 2020, so we have since seen little justification to extend the agreement," Lee said.




Emailmhlee@koreatimes.co.kr Article ListMore articles by this reporter
 
LG
  • Seoul City to retrofit manholes to prevent fatal falls during floods
  • Ruling party politicians' visits to flood-damaged areas cause stir
  • Yoon pardons Samsung chief, other business tycoons to 'overcome economic crisis'
  • Korea lacks data to operate autonomous vehicles
  • Disney beats Netflix in streaming subscribers
  • Lotte Chilsung Beverage CEO's leadership questioned over numerous scandals
  • Star novelist's 'Harbin' on Korean independence fighter becomes bestseller
  • [Exclusive] KDB accelerates drive to set up new hub in EU
  • Hyundai to set up Robot AI research institute in US
  • Naturalized Korean proposes inclusion of migrant brides in transport subsidy bill
  • Interactive News
  • With tough love,
  • 'Santa dogs' help rebuild burnt forests in Andong
  • 'Santa dogs' help rebuild burnt forests in Andong
  • A tale of natural wine
    • Death of young webtoon artist sparks controversy over harsh working conditions Death of young webtoon artist sparks controversy over harsh working conditions
    • 'Good Doctor' director to debut Netflix's high-strung suspense series, 'A Model Family' 'Good Doctor' director to debut Netflix's high-strung suspense series, 'A Model Family'
    • Musical 'Kinky Boots' tells people to love themselves as they are Musical 'Kinky Boots' tells people to love themselves as they are
    • Crime thriller 'Limit' is about mother's quest to save abducted son Crime thriller 'Limit' is about mother's quest to save abducted son
    • From P1Harmony to Zico, K-pop hotshots to perform in Abu Dhabi next month From P1Harmony to Zico, K-pop hotshots to perform in Abu Dhabi next month
    DARKROOM
    • Ice is melting, land is burning

      Ice is melting, land is burning

    • Tottenham 6-3 Team K League

      Tottenham 6-3 Team K League

    • Afghanistan earthquake killed more than 1,000

      Afghanistan earthquake killed more than 1,000

    • Divided America reacts to overturn of Roe vs. Wade

      Divided America reacts to overturn of Roe vs. Wade

    • Namaste: Yogis to celebrate International Yoga Day

      Namaste: Yogis to celebrate International Yoga Day

    The Korea Times
    CEO & Publisher : Oh Young-jin
    Digital News Email : webmaster@koreatimes.co.kr
    Tel : 02-724-2114
    Online newspaper registration No : 서울,아52844
    Date of registration : 2020.02.05
    Masthead : The Korea Times
    Copyright © koreatimes.co.kr. All rights reserved.
    • About Us
    • Introduction
    • History
    • Location
    • Media Kit
    • Contact Us
    • Products & Service
    • Subscribe
    • E-paper
    • Mobile Service
    • RSS Service
    • Content Sales
    • Policy
    • Privacy Statement
    • Terms of Service
    • 고충처리인
    • Youth Protection Policy
    • Code of Ethics
    • Copyright Policy
    • Family Site
    • Hankook Ilbo
    • Dongwha Group