BOK must ensure inflation continues to climb before raising policy rates -board member
SEOUL, Sept 12 (Reuters) - South Korea's central bank needs
to ensure that inflation moves towards its target level before
raising policy interest rates, a Bank of Korea (BOK) board
member said, putting a dampener on expectations for further
monetary tightening in the coming months.
"Taking pre-emptive (policy) steps would be dangerous under
current inflation path," Shin In-seok, one of the BOK's seven
members at the Monetary Policy Board said in a press conference
in Seoul on Wednesday.
"Any adjustments in policy rates should be carried out with
confirmation that inflation is picking up."
Shin's remarks could potentially hose down expectations of
further near-term policy tightening as headline inflation has
stayed below the central bank's target of 2 percent since
The BOK held its policy rate steady at 1.50
percent in a 6-1 vote at the end of last month, citing doubts
about job market recovery and weak inflationary pressure.
In an Aug. 29 Reuters survey, 11 of 19 economists expected
the central bank to raise interest rates before the end of this
The BOK joined its major peers in November by raising
interest rates for the first time in more than six years, yet it
has tempered market expectations for more amid the feeble
(Reporting by Cynthia Kim;
Editing by Shri Navaratnam)
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