The Bank of Korea’s new Senior Deputy Governor, Kwon Min-soo, said on Friday that monetary policy will be set with extreme caution, reflecting the need to balance growth, inflation, and financial stability.
Speaking on his first day in office, Kwon noted that economic growth in Asia’s fourth-largest economy is improving more strongly than anticipated, while inflation remains above target. He added that financial stability risks, foreign exchange volatility, and geopolitical factors will also influence decisions. Policy effects and potential side effects of rate hikes must be weighed carefully, he said.
Last month, the central bank raised interest rates for the first time in 3.5 years, signaling further tightening may follow. The decision comes as the South Korean won has strengthened to 11-month highs, though Kwon described the currency’s trajectory as a policy variable influenced by external factors. He suggested fundamentals support further appreciation but left room for intervention if needed.
The Bank of Korea’s next policy meeting is scheduled for August 27, where officials will assess evolving macroeconomic conditions before determining the next steps.
