BOK policymakers cautious about economy, minutes show

SEOUL, Nov. 24 (Yonhap) -- Policymakers at South Korea's central bank struck a
cautious note for the economy, saying that the current easing steps need to be
maintained for the time being, the bank's October minutes showed Tuesday.
They also said rising housing prices, one of the main concerns, were stabilizing
on the back of the government's regulatory controls on home-backed lending.
In a rate-setting meeting on Oct. 9, the Bank of Korea (BOK) froze the benchmark
7-day repo rate at a record low of 2 percent for the eighth straight month. It
cut the rate by a total of 3.25 percentage points between October 2008 and
February in an attempt to put the brakes on a sharp economic free-fall.
"Korea's economic activities are recovering to pre-crisis levels, and debates
over whether to wind back emergency steps taken to stem the global economic
recession are increasing. But given uncertainty surrounding the Korean economy, I
think a hasty shift in the monetary policy could involve higher costs," one
policymaker said.
Another member said that as the private sector has yet to show sustainable
recovery, there is the need to maintain an accommodative stance for the time
being.
In September, BOK Gov. Lee Seong-tae hinted that the bank could hike the rate if
housing prices continue to rise, but he softened his tone in October, saying that
his remarks in September did not mean an imminent rate increase -- a signal that
the BOK would not be in a hurry to shift into a tightening bias.
On Nov. 12, the BOK left the key rate unchanged for the ninth straight month,
citing still murky global economic outlooks, while analysts say a possible rate
hike may come in the first quarter of next year after assessing the pace of the
recovery. The next review is slated for Dec. 10.
sooyeon@yna.co.kr
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