BOK to keep restrictive monetary policy 'for considerable period of time'

• Published date: 09 March 2023
• Publication title: The Korea Times

The Bank of Korea (BOK) said Thursday it will keep the current restrictive monetary policy stance "for a considerable period of time" and determine whether to push for additional rate hikes down the road with priority placed on price stability.

In a policy brief to lawmakers, the central bank voiced worries that uncertainty remains high over how fast inflation is easing, saying things depend much on external factors, such as China's economic reopening, the ongoing war in Ukraine and the trajectory of monetary policy in the United States.

"Although domestic economic growth is expected to decelerate, inflation is expected to remain high and well above the target level, and uncertainty in the policy environment is high, so it is necessary to continue the tightening stance for a considerable period of time with a focus on price stability to determine the need for further hikes," the BOK said.

"There is a great deal of uncertainty about the pace of future domestic inflation and the timing of price growth moving toward the inflation target," it added. "China's resumption of economic activity, the war in Ukraine and the U.S. Fed's monetary policy are also likely to contribute to the slowdown in domestic inflation."

Last month, the BOK left its policy interest rate unchanged at 3.5...