Bank of Korea Governor Shin Hyun-sung announced on October 22 that the benchmark interest rate will remain at 3.00%, stating, "This hold is the fruit of our diligent efforts," and emphasized the need to continue a tightening monetary policy.
During a press conference following the Monetary Policy Committee meeting, Shin noted, "We have secured policy space through consecutive interest rate hikes," adding that this allows for flexibility in implementing policies tailored to domestic economic conditions without being pressured by market fluctuations.
He remarked, "Despite the U.S. Federal Reserve's interest rate hike in September and significant market volatility, the Korean financial market has shown considerable stability," and assessed that proactive policy measures have contributed to financial stability, a slowdown in housing price increases, and a moderation in the pace of rising financial vulnerability indices.
Shin further explained, "At the August meeting, I mentioned that we prevented potential issues with a hoe, and I believe this hold is the result of that effort." However, he stressed that this decision does not signify a shift away from the tightening stance. He stated, "In terms of growth and inflation, we are seeing stronger trends than we did at the August meeting," and expressed the belief that it is necessary to maintain the current tightening policy.
Regarding economic growth forecasts, he indicated an upward revision is likely. "The growth projections for this year and next were previously set at 3.3% and 2.9%, respectively, but they are expected to be significantly higher now," he said, adding that revised forecasts will be announced at the November meeting.
Shin also predicted that inflation rates would exceed previous expectations. He stated, "While this year's inflation is generally expected to align with the August forecast, next year's inflation is anticipated to be slightly higher than the previous estimate of 2.9%."
* This article has been translated by AI.
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