퇴임 앞둔 한은 부총재 “금리 인상 기조 지속할 필요”

The head of the Korean Central Bank, Yun Jeong-song, has suggested that the Central Bank should continue raising interest rates despite his imminent retirement. At a press briefing in Seoul, Yun said that while the economy is growing better than expected, rising inflation and financial stability risks could persist. The Monetary Policy Committee meeting, where Yun will be replaced, is scheduled for the 27th.

Yun will be the deputy governor of the Financial Transactions Committee and will be appointed by the president. The Bank has raised the benchmark interest rate from 2.50% to 2.75% since last month, putting an end to the prolonged easing cycle that began in January 2023. Yun said that the upcoming meeting will likely see another rate hike.

He noted that the July GDP and July inflation figures have already been released, and if the central bank's position at the August meeting is confirmed, the outlook for inflation and growth should be reviewed. Yun emphasized that if the growth rate and inflation remain strong, the rate hike in July was justified. He explained that this time, the growth is different from previous hikes, as trade conditions have improved, resulting in unprecedented growth of nominal GDP and increased industrial output.

The unusually strong increase in income has fueled inflation and made rate hikes more necessary. Yun also highlighted that the cost pressures from the Middle East situation, combined with demand-side pressures from economic improvement, could lead to sustained upward pressure on prices. While consumer price inflation may not be as high as during the Russia-Ukraine war, it could persist for a long time.

Regarding the financial stability, Yun pointed out that the strengthening of housing prices, the volatile rental market, and the expansion of household debt due to high property prices show the need to continue pursuing macro-financial stability policies, real estate policies, and deconcentrating Seoul and other metropolitan areas.

When asked about the USD-KRW exchange rate outlook, Yun said that while the exchange rate has dropped, it remains high. He noted that factors such as fundamentals, such as industrial output surplus and trade surplus, have caused the appreciation, which will gradually stabilize over time.