New BOK senior deputy gov. calls for prudent, flexible monetary policy
Bank of Korea (BOK) Senior Deputy Gov. Kwon Min-soo speaks during his inauguration ceremony held at the BOK's headquarters in Seoul, Friday. Courtesy of BOK
The new senior deputy governor of the Bank of Korea (BOK) said Friday that monetary policy should be implemented in a prudent and flexible manner as expectations grow for a rate hike at next week's policy meeting amid accelerating inflation.
"While raising interest rates can have certain policy benefits, there may also be side effects," Senior Deputy Gov. Kwon Min-soo told reporters after his inauguration ceremony.
"I believe this is a time when we must make policy decisions in a balanced and cautious manner, while remaining flexible when necessary," he said. "When deciding interest rates, we must take into account both growth trends and inflation, as well as financial stability."
Kwon, who began his four-year term as senior deputy governor Friday, serves as an ex officio member of the Monetary Policy Board and will participate as a board member starting with next Thursday's rate-setting meeting.
His comments came after the board raised the benchmark rate by 0.25 percentage point to 2.75 percent at its last meeting in July.
As the central bank has repeatedly stressed its commitment to curbing mounting inflationary pressure, whether the BOK will deliver a rare back-to-back rate hike next week is drawing attention.
The board cited solid economic growth driven by robust semiconductor exports and high consumer prices well above the BOK's 2 percent target.