Key insights
- Bank of Korea signals potential rate hikes due to persistent inflation despite government measures. While chip exports are booming, overall economic growth is projected around 2%. This hawkish shift in monetary policy in South Korea could signal a broader global trend of central banks tightening policies, potentially creating headwinds for risk assets, including US equities.
SEOUL, May 4 (Reuters) - The Bank of Korea’s senior deputy governor said forward guidance on monetary policy would become more hawkish at the next meeting later this month, as it was time to consider interest rate hikes.
Ryoo Sang-dai, a member of the central bank’s seven-seat monetary policy board, made the remarks at a press conference on Sunday held on the sidelines of the annual Asian Development Bank meeting in Samarkand, Uzbekistan, according to the BOK.
Ryoo said inflation pressure was still high even after recent government measures to control consumer prices, while economic growth was expected to be around 2% this year amid a boom in chip exports.