Bank of Korea to assess inflation, growth for rate hikes, board member says

SEOUL, September 22 - A member of the Bank of Korea's board of directors has indicated that the central bank will decide on the timing and rate of future interest hikes by closely examining inflation, economic growth, and financial stability, according to Reuters.

Chang Yong-sung, the board member, outlined additional factors that could influence financial stability in a statement accompanying the central bank's recent financial stability report. These factors include mounting financial imbalances, income disparities across various sectors, global market dynamics, and geopolitical uncertainties, as noted by Chang.

To curtail the potential escalation of financial imbalances, Chang emphasized the importance of employing monetary and macroprudential policies in tandem, alongside ensuring policy coherence between fiscal and financial entities to mitigate challenges faced by economically disadvantaged groups.

Earlier this month, on August 27, the Bank of Korea increased its benchmark interest rate by 25 basis points to 3.00 percent, marking the second consecutive rate hike. This action was taken despite inflation persisting above the central bank's target and ongoing concerns regarding financial stability.