Bank of Korea

February 27, 2018

South Korea’s seven-day repo rate had been at 1.25% from June 2016 until a 25-basis point increase three months ago, which was the first hike since 2011. A unanimous vote kept the rate at 1.5% in the last meeting of Governor Lee’s 4-year term. Governors rarely serve more than one term. A statement released by the central bank notes foresees decent growth ahead and projects that inflation will rise eventually while noting a recent deceleration of price pressure, which is currently low at around 1%. Monetary policymakers in the future will be challenged by rising U.S. interest rates and the usual array of external risks. The statement pledges to “carefully monitor any changes in the monetary policies of major countries, conditions related to trade with major countries, the trend of increase in household debt, and geopolitical risks.”

Copyright 2018, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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