Bank of Korea likely to raise interest rates further, outgoing deputy chief says

South Korea's central bank, the Bank of Korea, is likely to increase interest rates further to combat persistent inflation, according to outgoing deputy chief Ryoo Sang-dai. He stated that unless there is an extraordinary shock or factor, an additional rate hike is probable. Ryoo, a member of the bank's monetary policy board, explained that the central bank's interest-rate policy is conducted proactively to pre-empt potential issues.

The bank raised rates for the first time in 3-1/2 years last month, with more hikes anticipated due to robust growth in Asia's fourth-largest economy fueling inflation concerns. Ryoo emphasized that the central bank is primarily concerned about demand-driven inflation rather than supply shocks stemming from Middle East conflicts.

Inflation remains a significant concern for policymakers, with recent data showing inflation easing to a three-month low in July, still short of market expectations despite falling oil prices.