ID :
84572
Thu, 10/15/2009 - 09:29
Auther :
Shortlink :
https://www.oananews.org//node/84572
The shortlink copeid
BOK pledges to maintain accommodative policy stance
SEOUL, Oct. 15 (Yonhap) -- South Korea's central bank said Thursday it will maintain an accommodative policy stance for the time being due to lingering economic uncertainty, but added the bank plans to closely watch asset prices and cash flows.
The Korean economy is recovering at a faster-than-expected pace on the back of
aggressive fiscal spending and rate cuts. But despite the upbeat outlook,
uncertainty over the global economy and a sluggish job market continue to be a
drag.
"The Bank of Korea (BOK) will focus its monetary policy on maintaining improving
economic activity and stabilizing financial markets," the BOK said in a report to
the National Assembly. "In this process, the bank will closely watch movements in
asset prices, capital flows and foreign currency liquidity conditions to ensure
that the current easing stance does not impede economic and financial stability."
A sharp gain in home-backed lending and rising housing prices are key concerns
for the BOK as it fears such movements could spark a potential asset bubble when
the economy begins to pick up in earnest. The central bank cut the key rate by a
total of 3.25 percentage points to a record low of 2 percent between October and
February.
After September's rate-setting meeting, BOK Gov. Lee Seong-tae hinted that the
bank could hike the rate if housing prices continue to rise.
Softening from that position on Friday, Gov. Lee said his remarks in September
did not mean an imminent rate increase, signaling that the BOK would be in no
hurry to tighten its monetary policy as it assesses economic conditions. He added
that if recent regulatory controls over mortgage lending are found to be
effective, it could lessen the burden on monetary policy authorities.
Meanwhile, the Korean economy, Asia's fourth-largest, is expected to make steady
gains despite persisting uncertainty.
The BOK said consumer prices are likely to stabilize for the time being, although
they are expected to rise starting in the second half of next year as overall
demand picks up and raw material costs increase.
sooyeon@yna.co.kr
(END)
The Korean economy is recovering at a faster-than-expected pace on the back of
aggressive fiscal spending and rate cuts. But despite the upbeat outlook,
uncertainty over the global economy and a sluggish job market continue to be a
drag.
"The Bank of Korea (BOK) will focus its monetary policy on maintaining improving
economic activity and stabilizing financial markets," the BOK said in a report to
the National Assembly. "In this process, the bank will closely watch movements in
asset prices, capital flows and foreign currency liquidity conditions to ensure
that the current easing stance does not impede economic and financial stability."
A sharp gain in home-backed lending and rising housing prices are key concerns
for the BOK as it fears such movements could spark a potential asset bubble when
the economy begins to pick up in earnest. The central bank cut the key rate by a
total of 3.25 percentage points to a record low of 2 percent between October and
February.
After September's rate-setting meeting, BOK Gov. Lee Seong-tae hinted that the
bank could hike the rate if housing prices continue to rise.
Softening from that position on Friday, Gov. Lee said his remarks in September
did not mean an imminent rate increase, signaling that the BOK would be in no
hurry to tighten its monetary policy as it assesses economic conditions. He added
that if recent regulatory controls over mortgage lending are found to be
effective, it could lessen the burden on monetary policy authorities.
Meanwhile, the Korean economy, Asia's fourth-largest, is expected to make steady
gains despite persisting uncertainty.
The BOK said consumer prices are likely to stabilize for the time being, although
they are expected to rise starting in the second half of next year as overall
demand picks up and raw material costs increase.
sooyeon@yna.co.kr
(END)
