Two of seven Bank of Korea board members open to rate hikes - minutes (updated)
19/12/2023 07:54
(Adds details, comments in paragraphs 3-6)
By Cynthia Kim
SEOUL, Dec 19 (Reuters) - Two of the Bank of Korea's
seven board members said the bank should consider further
raising interest rates if inflation persists for longer than
expected, November meeting minutes showed on Tuesday.
Raising rates would prioritise controlling price increases
over risks to growth. On Nov. 30 at its final policy meeting of
the year, South Korea's central bank unanimously kept monetary
policy unchanged and signalled it may need to keep interest
rates higher for longer to head off persistent inflation risks.
"(The BOK) needs to consider further tightening should
inflation path stay above the expected trajectory and take
longer to reach the target level," one of the seven board
members said.
Another member who echoed that view said further rate
hikes might be necessary, especially if supply-side inflationary
pressure adds to higher inflation expectations.
Most economists see the BOK as having reached its peak
rate after raising rates by 300 basis points, and expect it to
start easing policy from the third quarter of next year as
cooling inflation makes restrictive borrowing costs difficult to
justify to the public.
Tuesday's minutes showed that most board members said
monetary policy should remain restrictive for the time being as
they warned of inflationary risks from the Israel-Hamas conflict
and global oil prices.
(Reporting by Cynthia Kim; Editing by Muralikumar Anantharaman
and Christian Schmollinger)
((Cynthia.Kim@thomsonreuters.com; 822 3704 5655; Reuters
Messaging: cynthia.kim.thomsonreuters.com@reuters.net))