Bank of Korea Governor Rhee Chang-yong said on Oct. 12 that the most important factor in monetary policy decisions is the inflation trend. He made the remark during a National Assembly Strategy and Finance Committee audit session held at the central bank in Jung-gu, Seoul, when asked whether the Bank of Korea could raise rates again in October or November. Rhee said the central bank is paying close attention to the heavier burden inflation places on low-income households and economically vulnerable groups. He added that vulnerable borrowers are also under pressure from high interest rates and can feel the strain of the central bank’s policy stance. The comments were interpreted by the market as a sign that the Bank of Korea is still weighing two competing pressures as it considers its rate path: containing inflation while easing the burden that high rates place on households and businesses.
Bank of Korea Governor Rhee Chang-yong said on Oct. 12 that 「the most important thing」 in monetary policy decisions is the path of inflation.
Rhee made the comment during a National Assembly Strategy and Finance Committee audit session held at the Bank of Korea in Jung-gu, Seoul, in response to a question about whether the central bank could raise interest rates again in October or November.
He said the Bank of Korea is paying particular attention to the greater impact inflation pressure has on low-income groups and economically vulnerable households. 「One point we especially emphasize is that, because of inflation, low-income and vulnerable groups suffer the most,」 he said.
Rhee also said vulnerable borrowers affected by high interest rates feel pressure from the central bank’s monetary policy.
The market interpreted his remarks as a sign that the Bank of Korea is still trying to balance inflation control against the pressure that high rates place on households and businesses when considering its rate path.
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