will alter coverage when extra sure of inflation easing By Reuters
© Reuters. FILE PHOTO: South Korea’s new central financial institution governor Rhee Chang-yong speaks throughout his inauguration ceremony in Seoul, South Korea April 21, 2022. SeongJoon Cho/Pool by way of REUTERS/File Photograph
SEOUL (Reuters) – South Korea’s central financial institution stated on Thursday it could change its aggressive coverage tightening stance when it turns into extra sure that inflation and financial development are slowing, with out giving any trace on the probably timing.
The Financial institution of Korea stated in a coverage report back to parliament that whereas the downward threat to financial development is rising, it believes its coverage focus ought to be on containing inflation so long as worth pressures stay excessive.
It stated it could “reply in an acceptable method” when a slowing development in inflation turns into extra pronounced, inflation expectation weakens and the downward strain on financial development turns into stronger.
The Financial institution of Korea, which in August 2021 turned one of many first main central banks to start elevating rates of interest, has lifted its benchmark charge by a complete of 275 foundation factors from a file low of 0.5%.
Governor Rhee Chang-yong stated on the Reuters NEXT convention final week that he hopes the height of its goal charge on this cycle will likely be round 3.5%, in contrast with 3.25% at current, indicating the central financial institution’s tightening cycle was close to its finish.
The coverage report was meant to summarise the central financial institution’s place made public in latest months. It has no coverage assembly this month and its subsequent assembly to evaluate rates of interest is about for Jan. 13, 2023.