BOK head hints at another rate hike in 1st quarter of 2022

Asia's Tech News Daily

BOK head hints at another rate hike in 1st quarter of 2022

Bank of Korea Governor Lee Ju-yeol speaks during an online press briefing held at the bank’s headquarters in Seoul, Thursday. Yonhap

Central bank raises key interest rate by 25 basis points to 1%

BOK head hints at another rate hike in 1st quarter of 2022

By Lee Kyung-min

Bank of Korea Governor Lee Ju-yeol hinted at another key rate hike in the first quarter of next year, Thursday, in what is widely seen as an attempt to tame concerns over inflation and soaring household debt.

His remarks came less than an hour after the BOK monetary policy board voted to hike the key rate by 25 basis points to 1 percent, a widely expected move brought on by rising inflation, but buttressed by the country’s solid economic recovery

“I don’t think we have not ruled out the possibility of a rate hike in the first quarter of next year,” Lee said during a press briefing held virtually from the bank’s headquarters in Seoul. “The key rate raised to 1 percent today is still accommodative, given the growth path and changes in consumer prices. Gradual yet firm policy normalization is a critically needed course of action.”

He distanced himself from identifying the exact timeline for the rate hike, adding the uncertainty-swayed decision will have to factor in high-frequency datasets to arrive in the coming months.

The benchmark rate has been hovering in the zero range since the BOK cut it by a half percentage point to 0.75 percent in March last year and delivered an additional 25 basis point reduction in May the same year to an all-time low of 0.5 percent. In August this year, the central bank delivered its first pandemic-era rate increase, raising it 25 basis points to 0.75 percent.

The effect of monetary policy could be undermined, in the governor’s view, if it is outpaced significantly by the stronger-than-expected recovery in the real economy, a reason why Lee considers a prompt drawdown in easing as inevitable.

He added that relative to its emerging market peers, Korea is insulated from financial market volatility caused by growing expectations over a possible rate hike by the U.S. Federal Reserve in the latter half of next year.

Policy consistency, Lee stressed, will be maintained to maximize the efficiency and efficacy of macro-prudential measures recently put in place to bring snowballing household debt under control.

Continued buildup of factors exacerbating a financial imbalance ― mostly used to describe the surge in credit risk ― are expected to dissipate, backed by cooperation between the monetary and fiscal authorities.

“The policy effect of reducing the financial imbalance should be pronounced in the coming months, and should be followed by deterred investor behavior that has been seeking short-term gains from the pandemic-enabled excessive borrowing over the past few years,” Lee said.

The central bank maintained its growth outlook of 4 percent for this year, holding steady to an assessment made in August. However, it expects inflation will soar to 2.3 percent this year, and 2 percent next year. This is a significant upward revision from 2.1 percent and 1.5 percent announced three months earlier.

“Consumer prices rose to the low-3 percent range, driven chiefly by the steep rise in oil prices and, in part, a base effect from last year. Core inflation excluding volatile food and energy prices also increased to the mid-2 percent rage. The annual inflation will continue to remain elevated at a level far higher than the August outlook, before dipping to mid-2 percent next year,” the governor said.

Korea’s consumer inflation rose 3.2 percent in October from a year earlier, the fastest year-on-year gain since January 2012.

Internet Explorer Channel Network
Asia's Tech News Daily
News Related


Moon expects S. Korea's trade to post all-time high of over $1.2tr this year

President Moon Jae-in (C) poses with awardees during a ceremony to mark the 58th Trade Day at a convention center in Seoul on Monday. (Yonhap)President Moon Jae-in said Monday that ... Read more »

Yoon's top election pledge will be helping economically vulnerable people hit by pandemic: official

This photo provided by People Power Party (PPP) shows Kim Chong-in (L), a veteran politican who accepted to lead the PPP’s presidential election campaign committee, and Yoon Seok-youl, the presidential ... Read more »

Military reports 19 more COVID-19 cases

Soldiers on leave. (Yonhap)South Korea’s military reported 19 additional COVID-19 cases, all of which are breakthrough ones, Monday, raising the total caseload among its personnel to 2,531. Of the new ... Read more »

Navy's frigate Jeonbuk selected as '2021 top gun' ship

This photo, released on Monday by the Navy, shows sailors of its 2,500-ton frigate, Jeonbuk, posing for a photo. (The Navy)South Korea’s Navy has selected the 2,500-ton frigate, Jeonbuk, as ... Read more »

New cases fall below 5,000; toughened virus rules go into effect

People wait for the coronavirus testing at a makeshift testing site in Seoul, Dec. 2. AP-Yonhap South Korea’s new coronavirus cases fell below 5,000 for the first time in three ... Read more »

Yoon leads Lee by 6.5 percentage points in presidential race: survey

Lee Jae-myung (L), the presidential nominee of the ruling Democratic Party, shakes hands with Yoon Seok-youl, the nominee of the main opposition People Power Party, at a forum in Seoul ... Read more »

Gov't to focus on containing Omicron variant with tightened anti-virus measures: PM

Prime Minster Kim Boo-kyum speaks during a meeting on the government’s response to COVID-19 at City Hall in Seoul, Dec. 6. Yonhap South Korea will focus on containing the Omicron ... Read more »

BTS members return home from LA

Members of BTS arrive at Incheon International Airport from Loa Angeles on Dec. 6. Yonhap Three members of the K-pop superband BTS returned home Monday from Los Angeles where it ... Read more »

S. Korea to focus on containing omicron variant with tightened anti-virus measures: PM

Prime Minister Kim Boo-kyum speaks at a COVID-19 response meeting in Seoul on Monday. (Yonhap)South Korea will focus on containing the omicron variant of the novel coronavirus till the end ... Read more »

From 'Spider-Man: No Way Home' to 'Matrix 4,' big movies gearing up for cinema releases in December

A poster for “Spider-Man: No Way Home,” “Matrix Resurrection” / Courtesy of Sony Pictures, Warner Bros. Korea By Kwak Yeon-soo The year-end holiday season has big films lined up for ... Read more »

What is Samsung's Harman up to?

A digital cockpit developed by Samsung and Harman is on display at the Consumer Electronics Show 2018 in Las Vegas. Yonhap Connected car tech provider’s performance yet to justify price ... Read more »

(EDITORIAL from Korea Herald on Dec. 6)

Bleak outlookRising consumer prices, shrinking income amid COVID-19 woes raise uncertainty The long-awaited year-end festive mood is unlikely to be seen in 2021, as South Korea is beset by a ... Read more »

(EDITORIAL from Korea Times on Dec. 6)

Double whammyConsumer prices surge, while income declines South Koreans are bearing the brunt of a double whammy ― soaring consumer prices and declining income. Simply put, they are increasingly worse ... Read more »

Saudi Arabia to allow entry for people vaccinated with Sputnik V from January 1

Saudi Arabia joined 101 other countries approving entry of individuals vaccinated with the Sputnik V vaccine Read more »

Management reshuffles at Orion and Lotte surprise market insiders

From left, new Orion CEO Lee Seung-joon and new chief of Lotte Group Food & Beverage Business Unit Lee Young-goo / Courtesy of Orion and Lotte Confectionery By Kim Jae-heun ... Read more »

E-Mart seeks to acquire Ministop Korea

E-Mart 24 store in Incheon / Korea Times file By Kim Jae-heun E-Mart 24, a convenience store brand of the country’s largest retailer E-Mart, has joined the bid to acquire ... Read more »

US ambassador to UN to join peacekeeping conference virtually

Linda Thomas-Greenfield (US Senate website)US Ambassador to the United Nations Linda Thomas-Greenfield will attend a virtual conference on UN peacekeeping hosted by the Seoul government next week, according to her ... Read more »

Korean firms appoint more young executives for agility, flexibility

Korea’s top companies are appointing young members in their 30s and 40s to key positions amid the increasing competition to develop new businesses. / gettyimagesbank Companies also seek better communication ... Read more »

Wealthy Koreans see their assets surge in value during pandemic

gettyimagesbank Increase in real estate prices is cited as main reason behind rising asset values By Anna J. Park High-income earners in the top 10 percent to 30 percent of ... Read more »

Filmmaker Shin Jung-won, B-movie pioneer, dies at 46

Filmmaker Shin Jung-won / Korea Times file By Kwak Yeon-soo Director Shin Jung-won, an innovative filmmaker known for his unflinching, genre-bending films, “To Catch a Virgin Ghost” (2004) and “Night ... Read more »

7 TV home shopping businesses fined W4 bil. for unfair practices

Korea Fair Trade Commission Chairwoman Joh Sung-wook / Korea Times file By Kim Bo-eun The Korea Fair Trade Commission (KFTC) said Sunday it had imposed 4.15 billion won ($3.46 million) ... Read more »

Widened vaccine pass provokes backlash from unvaccinated, self-employed

Medical workers collect samples for a coronavirus test at a testing center in Songpa District of Seoul, Saturday. Yonhap Vaccine pass to be applied on eateries, cafes from Monday By ... Read more »

[INTERVIEW] Korean-German pianist releases debut album 'Wonderworld'-mixture of classical and modern works

Pianist Gina Alice performs during a promotional event held online for her debut album, “Wonderworld,” in Frankfurt, Thursday. Courtesy of Universal Music By Park Ji-won The 2019 marriage of renowned ... Read more »

Crimea plans to host delegation from Syria to discuss economic links

Deputy Chairman of the Council of Ministers of Crimea, Permanent Representative of Crimea under the Russian President Georgiy Muradov reiterated that in 2019, an agreement on cooperation in the sphere of trade and economy was signed between the Crimean government and the Syrian ministry yet the trade was limited due to the coronavirus pandemic Read more »

KakaoBank overtakes commercial banks in productivity

KakaoBank’s headquarters in Seongnam, Gyeonggi Province, is seen in this August file photo. Yonhap By Park Jae-hyuk KakaoBank’s profit per employee during the first three quarters of this year reached ... Read more »

Gov't still uncertain about complete resumption of short-selling

Financial Services Commission (FSC) Chairman Koh Seung-beom speaks during a press conference at the Government Complex Seoul, Friday. Courtesy of the FSC By Park Jae-hyuk The government remains uncertain about ... Read more »

Cyberattacks targeting S.Korea's security strategies will increase during elections: NIS

Hackers with the backing of foreign governments will aggressively target information on Seoul’s national security strategies in the runup to the presidential election next March, the South Korean spy agency ... Read more »

Military reports 24 more COVID-19 cases

South Korean soldiers (Yonhap)South Korea’s military reported 24 additional COVID-19 cases, including two dozen breakthrough ones, Sunday amid growing concerns over the new omicron variant, raising the total caseload among ... Read more »

Monthlong party strife resolved, Yoon vows ‘united efforts' in presidential race

The main opposition People Power Party’s presidential candidate Yoon Suk-yeol (right) and party leader Lee Jun-seok pose during an event in Busan on Saturday. (People Power Party)Resolving an internal conflict ... Read more »

Bitcoin briefly loses $10,000 in nervous market

Representations of cryptocurrencies Bitcoin, Ethereum, DogeCoin, Ripple, Litecoin are placed on PC motherboard in this illustration. Reuters-Yonhap The bitcoin dropped sharply overnight, losing $10,000 in value in a nervous market ... Read more »

FSC puts top priority on bringing household debt growth to pre-pandemic levels

SEOUL, Dec. 5 (Yonhap) — The head of South Korea’s top financial regulator has said he will make continued efforts to bring household debt growth down to pre-pandemic levels, as ... Read more »

Bitcoin price down over 17% to $47,060, says CoinDesk data

It is a decentralized digital currency without a central bank or single administrator Read more »

Nighttime eating affects body clock, can lead to glucose intolerance

gettyimagesbank Eating at night may increase a person’s risk for glucose intolerance, or prediabetes, a study published Friday by the journal Science Advances found.Confining meals to daytime can help maintain ... Read more »

BTS opens LA stop of 2021 Jingle Ball Tour

K-pop superband BTS performs at the Los Angeles stop of this year’s iHeartRadio Jingle Ball Tour at the Forum Theater in the U.S. city, Dec. 3, in this photo provided ... Read more »

S. Korea reports suspected cases of highly pathogenic bird flu at egg farm

SEOUL, Dec. 4 (Yonhap) — South Korea on Saturday reported suspected cases of highly pathogenic bird flu at a local egg farm. The suspected cases of the avian influenza were ... Read more »

Moldova to post tender for selecting company to audit debt to Gazprom this month

The finance ministry is dealing with the issue," Infrastructure Minister Andrei Spinu said, adding that "Moldova will pay for the audit as it is in its interests." Read more »

Canada must once again grab its share of the auto industry, despite U.S. protectionism

The shift away from the internal combustion engine to electric vehicles is not a normal retooling of auto plants, but a full-scale recreation of the auto sector that will reshape ... Read more »

Vital Signs: Albanese to come clean on emissions targets, but a carbon price is still hush-hush

The Australian Labor Party is set to announce its target for cutting greenhouse gas emissions today. At the 2016 and 2019 elections, Labor promised net zero emissions by 2050 and ... Read more »

New daily cases hit new high of 5,352; 3 additional Omicron cases reported

An employee attaches a notice to the entrance of a Chinese restaurant in Seoul, Dec. 3, that says a customer is required to show proof of vaccination or a negative ... Read more »

BTS share holiday remix of 'Butter'

BTS / Courtesy of Big Hit Music South Korean boy band BTS has released new version of its hit single “Butter.” The K-pop group shared the “Butter (Holiday Remix)” on ... Read more »
On you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic