BoK governor sees need to raise rates when possible
Report: Lee paying close attention to consumption, investment figures
SEOUL: Bank of Korea (BoK) governor Lee Ju-yeol said the central bank should raise its benchmark interest rate when it becomes possible to do so, according to Yonhap.
“It is right to reduce the degree of accommodation when various conditions match up,” Lee said in Manila, where central bank governors held a meeting, according to the South Korean news agency.
Lee said he’s paying close attention to consumption, investment, tourist numbers and the country’s employment rate, and not just inflation.
“Financial imbalances may increase should BoK maintain the current interest rate when Korea’s economy continues 3% growth and inflation consolidates at 2%,” Lee was quoted as saying. The impact of the minimum-wage hike on consumer prices also needs closer examination, he said. The BoK kept its key interest rate steady on April 12, saying that inflation is seen slightly below its forecast. Board members at the central bank reiterated the need to maintain the current accommodative policy, according to minutes of last month’s meeting released last Wednesday.
Lee also said it’s possible that discussions with Japan on a suspended currency swap deal will resume sometime in the future.
Finding the right time for negotiations will be an issue because related departments in Japan must also be involved in order to reach an agreement, he said, according to Yonhap.
While the BoK has been doing research on the foreign-exchange market and the bank’s role in various scenarios related to the unification of the two Koreas, the central bank so far has no plans to expand its research team, Lee said.