BOK chief signals hawkish stance amid outlook for higher growth, rates
Bank of Korea (BOK) Gov. Shin Hyun-song said Friday the central bank will adjust its monetary policy to a future environment of higher economic growth and interest rates, signaling it will maintain a hawkish stance for some time. In response to a question from Rep. Kim Tae-nyeon of the ruling Democratic Party during a parliamentary audit at the National Assembly, Shin agreed with the assessment…
Bank of Korea Governor Shin Hyun-song signaled a hawkish monetary policy stance during a parliamentary audit on Friday. He stated that the central bank will adjust its policies to anticipate a future environment of higher economic growth and interest rates, indicating a prolonged hawkish approach. Responding to a question from Democratic Party representative Kim Tae-nyeon, Shin agreed that returning to ultra-low interest rates would be difficult.
The central bank has taken a more aggressive stance recently due to increasing inflation and robust economic growth. It raised the benchmark interest rate to 3 percent in July and August, the first consecutive hikes since January 2023. The rate had been the subject of seven consecutive increases since April 2022, indicating a tightening cycle.
Over a three-and-a-half-year period, the rate gradually decreased from 3.5 percent to its current level of 2.5 percent before the recent adjustments.
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