SEOUL, Dec 13 (Reuters) – Most Bank of Korea board members called for more attention to signs of stress in local financial markets and agreed to a rate hike at their November meeting, minutes showed on Tuesday.
The Bank of Korea’s (BOK) Monetary Policy Board unanimously raised interest rates (KROCRT=ECI) by 25 basis points to 3.25% at the November 24 meeting, the highest since 2012, after announcing a half-year hike in October percentage point had made .
One of the six members quoted in the minutes called for a pause in the tightening cycle that began in August last year amid rising instability in local markets and to assess the impact of past rate hikes to curb inflation.
“Going forward, we need to review the impact of past monetary policy decisions and how internal and external uncertainties are playing out before prudently deciding on the pace of further policy tightening,” the member said.
The minutes do not name speakers and contain no comments from Governor Rhee Chang-yong, who spoke at a press conference shortly after the meeting.
Other members were divided on how much attention the Bank of Korea should continue to devote to fighting inflation, but most of them agreed that instability in financial metrics deserved closer scrutiny after months of tightening.
“The impact of interest rate hikes over the past 15 months is becoming more evident in the property and financial markets, and corporate bond and short-term money markets are showing instability,” said another member.
About a week after the meeting, Rhee said in an interview at the Reuters NEXT conference that he hoped the policy rate would peak at around 3.5%, just 25 basis points above the last level.
reporting by Choonsik Yoo and Jihoon Lee; Edited by Kim Coghill
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