▲ Bank of Korea Gov. Shin Hyun-song speaks during a parliamentary session at the National Assembly in Seoul on July 9, 2026. (Yonhap)

(LEAD) BOK chief-key rate

(LEAD) BOK governor sees need for rate hike at appropriate time

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SEJONG, July 9 (Yonhap) -- The governor of the Bank of Korea (BOK) said Thursday he sees the need for a rate hike at an appropriate time, noting the central bank will consider various factors, including inflation hovering above target and other financial risks.

BOK Gov. Shin Hyun-song made the remark during a session at the National Assembly, also noting the South Korean economy is expected to maintain solid growth on the back of the semiconductor industry cycle and eased geopolitical tensions in the Middle East.

"I believe there needs to be a rate hike at an appropriate time," Shin said. "We need to consider factors such as inflation hovering above target, improved growth and extended risks for financial stability."

Shin added inflation is expected to remain elevated for a "considerable period" despite eased Middle East-related factors, as the impact of previous cost increases continues.

Touching on foreign exchange volatility, Shin said there is a chance the Korean won may strengthen against the dollar.

Shin added the recent decline of the Korean won against the greenback came amid market expectations of changes in U.S. monetary policy, along with foreign investors' rebalancing of their portfolios in South Korea.

The governor added the country does not lack liquidity to utilize measures such as currency swaps.

"(Currency swaps) are a measure to supply liquidity when we run out of it," Shin said. "In the current situation, we do not lack liquidity."

The BOK is making efforts to come up with policy recommendations from a neutral and longer-term perspective, touching on structural issues, such as low births, aging demographics, balanced regional growth and climate change, he added.

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