BOK governor sees need for rate hike at appropriate time

BOK Gov. Shin Hyun-song speaks at the second meeting of the Financial and Economic Planning Commission at the National Assembly in Seoul, Thursday. Yonhap

The governor of the Bank of Korea (BOK) said Thursday he sees the need for a rate hike at an appropriate time, noting the central bank will consider various factors, including inflation hovering above target and other financial risks.

BOK Gov. Shin Hyun-song made the remark during a session at the National Assembly, also noting the Korean economy is expected to maintain solid growth on the back of the semiconductor industry cycle and eased geopolitical tensions in the Middle East.

"I believe there needs to be a rate hike at an appropriate time," Shin said. "We need to consider factors such as inflation hovering above target, improved growth and extended risks for financial stability."

Shin added inflation is expected to remain elevated for a "considerable period" despite eased Middle East-related factors, as the impact of previous cost increases continues.

The BOK is making efforts to come up with policy recommendations from a neutral and longer-term perspective, touching on structural issues, such as low births, aging demographics, balanced regional growth and climate change, he added.