South Korea’s key rate is below neutral rate: board member – 27 Sep 2017

  • South Korea’s key rate is below neutral levels, a monetary board member said on 27 Sep 17, in the latest signal that the country’s central bank could move to raise interest rates going forward.
  • Shin In-seok, a member of the BOK monetary policy board, made the assessment in a meeting with reporters, noting that the BOK’s monetary policy is accommodative.
  • Earlier in Sep 17, BOK Deputy Governor Jeon Seung-cheol also made similar comments at an international conference in Seoul.
  • In Aug 17, the BOK kept its policy rate at an all-time low of 1.25%, though it has said that it may take a monetary tightening stance if the economy shows signs of robust recovery, a comment widely seen as signalling a rate hike by the central bank over the long haul.
  • Shin also voiced concerns about the increased economic uncertainty over North Korea risks and economic fallouts from a diplomatic row between South Korea and China.
  • Tensions have heightened on the Korean Peninsula as North Korean leader Kim Jong-un and U.S. President Donald Trump traded a war of words over Pyongyang’s nuclear and missile programs.

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