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| ▲ Bank of Korea (BOK) Gov. Rhee Chang-yong (C) presides over a Monetary Policy Committee meeting at the central bank in Seoul on Feb. 23, 2023. (Pool photo) (Yonhap) |
BOK-minutes
Monetary policymakers highlight need for time to gauge impact of previous rate hikes: minutes
SEOUL, March 14 (Yonhap) -- Most central bank policymakers underlined the need to take time to gauge the impact of previous rate hikes when they decided to leave the policy interest rate unchanged last month, minutes of their meeting showed Tuesday.
The seven-member monetary policy board of the Bank of Korea (BOK) held a rate-setting meeting on Feb. 23 and voted to freeze its key interest rate at 3.5 percent.
This marked the first time that the BOK stood pat following seven straight increases delivered since April last year to fight inflation. The decision was not unanimous, with one board member voting for a quarter-point rate increase.
"Given the economic conditions at home and abroad, it is appropriate to keep the key interest rate unchanged ... and to monitor the impact of the tightening on the real economy and inflation," an unidentified member was quoted as saying by the minutes.
"It seems appropriate to watch future developments in inflation and growth, as well as financial market conditions, before deciding whether to tighten further," the member noted.
Another member echoed the view, saying the interest rate has reached a restrictive level and the impact of previous increases has been "clearly visible" in financial markets.
"For the first time since the global financial crisis, the key interest rate has risen to a tightening level ... Given the time lag in monetary policy, we believe it is time to assess the effects of policy spillovers and consider further hikes based on developments of inflation and external and domestic uncertainties," the member said.
"The effects of rising interest rates are clearly visible in financial markets. We believe the effects are spilling over into the real economy."
One policymaker called for the need to further elevate the cost of borrowing, citing uncertainty over the path of inflation and the possibility of money outflows due to a wider rate difference with the United States in case the Federal Reserve's rate rises, the minutes showed.
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