World Economy

BoK Hints at Rate Increase

BoK Hints at Rate IncreaseBoK Hints at Rate Increase

Bank of Korea Gov. Lee Ju-yeol indicated Tuesday that the bank could raise interest rates in the future if the country hits its inflation and economic growth targets, Yonhap reported. “The accommodative monetary policy stance needs to be adjusted if consumer prices hit the inflation target and economic growth continues in line with the potential growth rate,” said Lee. The comment could be seen as indicating that the BoK is moving toward another interest rate rise, since he went on to note that Korea is on the right track in terms of growth and inflation. It last raised interest rates in November. “It appears that the Korean economy has grown in accordance with its potential growth based on the recent economic indicators … current consumer prices remain below the inflation target, but they are expected to increase in the second half of this year, especially in the fourth quarter,” he said. Korea’s consumer price growth has not yet reached the target inflation of 2%, as the latest reading, in May, was 1.5%.

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