Bank Of Korea Retains Key Rate As Expected
October 11 2021 - 9:59PM
RTTF2
Bank of Korea maintained its key interest rate on Tuesday but
signaled a rate hike as early as in November to rein in high
inflation and household debt.
The Monetary Policy Board of the Bank of Korea decided to leave
its base rate unchanged at 0.75 percent. The bank had raised its
rate by a quarter-point in August. Governor Lee Ju-yeol said the
bank can consider hiking key rate at the next meeting should the
economic recovery proceed as expected.
The board said it will appropriately adjust the degree of
monetary policy accommodation as the Korean economy is expected to
continue its sound growth and inflation to run above 2 percent for
some time, despite ongoing uncertainties over the virus, the bank
said in a statement.
The bank expects consumer price inflation to run at the mid-2
percent level for some time, exceeding the path projected in
August, before declining somewhat. Core inflation is forecast to
increase to around the upper-1 percent level.
Going forward, the economy is likely to continue its recovery
driven by private consumption. The economy is forecast to grow this
year at a pace around 4 percent, unchanged from the prior
outlook.
Further, policymakers observed that the increase in household
loans remains at a high level, and housing prices have continued to
increase rapidly in all parts of the country.
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