ID :
91766
Thu, 11/26/2009 - 15:54
Auther :
Shortlink :
https://www.oananews.org//node/91766
The shortlink copeid
(2nd LD) BOK sets inflation target at 2-4 pct for 2010-2012
(ATTN: RECASTS lead)
By Kim Soo-yeon
SEOUL, Nov. 26 (Yonhap) -- South Korea's central bank on Thursday set its
2010-2012 inflation target range at between 2 percent and 4 percent in a bid to
manage its monetary policy more flexibly and better cope with economic
uncertainty.
The policy-setting Monetary Policy Committee at the Bank of Korea (BOK) decided
earlier in the day to set the median inflation target at 3 percent for the
three-year period with a margin of plus or minus 1 percentage point.
The BOK sought to keep consumer inflation between 2.5 and 3.5 percent from 2007
to 2009.
"Between 2010 and 2012, there is a high chance that uncertainties will likely
increase as conditions surrounding inflation would be different from the period
before the global financial turmoil," the BOK said in a statement. "The need to
secure more leeway for managing the monetary policy from the mid-and-long-term
perspective was also taken into account."
But the BOK said the expansion of the band does not mean a change in its current
monetary policy stance.
It also added the bank will review the performance of the inflation target on an
annual basis and announce the results every December.
The expansion of the range comes as uncertainty about the global economy persists
despite signs of a recovery. The government and the central bank have both cast
cautious outlooks for the economy.
As the global economy has begun to emerge from the slump, ample liquidity
stemming from aggressive rate cuts and rising raw material prices is feared to
put upward pressure on consumer inflation down the road.
Debate has grown over when the BOK should begin to shift into a tightening
stance. The expansion of the band is widely expected to lessen the burden for the
BOK when weighing the timing of a rate hike, analysts say.
"Due to the expanded band, the BOK could get some room to manage its rate policy
more flexibly. The bank could take time in mulling the timing of a rate
increase," said Lee Sung-kwon, an economist at Shinhan Investment Corp.
The BOK froze the key interest rate at a record low of 2 percent in November for
the ninth straight month. It slashed the rate by a total of 3.25 percentage
points between October 2008 and February. The central bank is widely expected to
raise the borrowing costs as early as the first quarter of next year.
The government has reiterated that it will maintain its expansionary
macroeconomic policy stance until a sustainable economic recovery is assured.
sooyeon@yna.co.kr
(END)
By Kim Soo-yeon
SEOUL, Nov. 26 (Yonhap) -- South Korea's central bank on Thursday set its
2010-2012 inflation target range at between 2 percent and 4 percent in a bid to
manage its monetary policy more flexibly and better cope with economic
uncertainty.
The policy-setting Monetary Policy Committee at the Bank of Korea (BOK) decided
earlier in the day to set the median inflation target at 3 percent for the
three-year period with a margin of plus or minus 1 percentage point.
The BOK sought to keep consumer inflation between 2.5 and 3.5 percent from 2007
to 2009.
"Between 2010 and 2012, there is a high chance that uncertainties will likely
increase as conditions surrounding inflation would be different from the period
before the global financial turmoil," the BOK said in a statement. "The need to
secure more leeway for managing the monetary policy from the mid-and-long-term
perspective was also taken into account."
But the BOK said the expansion of the band does not mean a change in its current
monetary policy stance.
It also added the bank will review the performance of the inflation target on an
annual basis and announce the results every December.
The expansion of the range comes as uncertainty about the global economy persists
despite signs of a recovery. The government and the central bank have both cast
cautious outlooks for the economy.
As the global economy has begun to emerge from the slump, ample liquidity
stemming from aggressive rate cuts and rising raw material prices is feared to
put upward pressure on consumer inflation down the road.
Debate has grown over when the BOK should begin to shift into a tightening
stance. The expansion of the band is widely expected to lessen the burden for the
BOK when weighing the timing of a rate hike, analysts say.
"Due to the expanded band, the BOK could get some room to manage its rate policy
more flexibly. The bank could take time in mulling the timing of a rate
increase," said Lee Sung-kwon, an economist at Shinhan Investment Corp.
The BOK froze the key interest rate at a record low of 2 percent in November for
the ninth straight month. It slashed the rate by a total of 3.25 percentage
points between October 2008 and February. The central bank is widely expected to
raise the borrowing costs as early as the first quarter of next year.
The government has reiterated that it will maintain its expansionary
macroeconomic policy stance until a sustainable economic recovery is assured.
sooyeon@yna.co.kr
(END)
