BOK head says long streak of record-low rate not good

SEOUL, Oct. 23 (Yonhap) -- South Korea's top central banker said Friday it is not
desirable for the country's key interest rate to stand at a record low for an
extended period of time.
The Bank of Korea (BOK) cut its key interest rate by a total of 3.25 percentage
points to an all-time low of 2 percent between October last year and February in
an effort to stem a sharp economic freefall.
"I do not think keeping the rate at a record low for a long time is good," BOK
Gov. Lee Seong-tae said at a parliamentary audit session.
Amid signs of an economic recovery, debate over when the BOK will begin to
tighten its monetary policy has heated up.
In September, the BOK head hinted that the bank could hike the rate if housing
prices continue to rise, but he softened his tone this month, saying that his
remarks in September did not mean an imminent rate increase -- a sign that the
BOK would not be in a hurry to tighten its monetary policy, given the uncertain
economic outlook.
"Housing prices have been stabilizing since late September and should be
monitored further," Lee said when asked about the movement of the housing market,
one of the BOK's key concerns.
He said on Oct. 9 that if recent regulatory controls over mortgage lending are
found to be effective, it could lessen the burden on monetary policy authorities.
sooyeon@yna.co.kr
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