South Korea’s central bank will raise interest rates further to respond to persistent inflationary pressure, the outgoing deputy chief said on Tuesday.
Interest Rate Hike
The Bank of Korea Senior Deputy Governor Ryoo Sang-dai said that unless there is an extraordinary shock or factor, the possibility of an additional rate hike is high. This decision is in response to the country’s brisk growth and inflation risks.
The central bank is more concerned about demand-driven inflation than any supply shock stemming from the Middle East conflict. The domestic economic recovery is expected to generate gradual and persistent upward price pressure.
Ryoo stopped short of signaling the pace or extent of any further rate increases. With the won trading near 10-month highs after a sharp rally last month, Ryoo said exchange rates in the 1,400 won-per-dollar range were still “very high” and continued to exert significant upward pressure on inflation.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
