(C) Reuters. South Korean President Yoon Suk-yeol speaks at an interview with Reuters in Seoul, South Korea, November 28, 2022. REUTERS/Daewoung Kim
SEOUL (Reuters) – South Korea’s government and the central bank should pay greater attention to addressing any financial instability as the economy is headed for slower inflation, President Yoon Suk-yeol told Reuters.
“There are increasing opinions that inflation has passed its peak and it’s time to slow down the speed and reduce the breadth of the rate hikes. However we must still continue to closely monitor any possible financial instability,” Yoon said during a broader interview in his office on Monday, when asked if it is time for the Bank of Korea to slow monetary tightening.
Yoon’s comments come as the BOK last week signalled that it could be nearing the end of an unprecedented streak of policy tightening in Asia’s fourth-largest economy to curb inflation.
Yoon spoke hours after the finance ministry and the BOK announced a second round of support measures to ease strains in its short-term money market, as yields on three-month commercial paper reached a fresh 13-year high on Monday.
The BOK’s monetary policy committee unanimously agreed to hike interest rates by a quarter-percentage point to 3.25% at its Nov. 24 review – taking the benchmark rate to its highest since 2012. It was a smaller tightening after a half-percentage point increase in October, reflecting a slowdown in inflation to 5.7% in the same month from a near 24-year high reached in July.
Exclusive-South Korea’s Yoon: should pay attention to any ‘financial instability’
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