Lee Chang-yong "It Is Difficult to End Interest Rate Hikes Before the US"

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyung-min] Lee Chang-yong, Governor of the Bank of Korea, stated in an interview with foreign media in the United States that "it is difficult to end interest rate hikes before the US" and expressed his intention to continue raising rates until inflation subsides.

On the 27th (local time), in an interview in Jackson Hole, Wyoming, USA, Governor Lee said, "While the Bank of Korea's monetary policy is independent from the Korean government, it is not completely independent from the monetary policy of the US Federal Reserve (Fed)."

He added, "Since Korea's inflation is largely influenced by external factors such as oil prices, and it is difficult to predict when oil prices will rise again, it is hard to specify the timing to end rate hikes," and said, "As long as the inflation rate remains at a high level (4-5%), the rate hike stance will be maintained."

Governor Lee explained that although Korea's inflation rate in August is expected to be lower than 6.3% in July, it is premature to judge that inflation has peaked, and with winter approaching, gas prices may rise again.

He also said he would monitor the impact of Federal Reserve Chair Jerome Powell's remarks at the Jackson Hole meeting on the won/dollar exchange rate.

At the Jackson Hole meeting on the 26th (local time), Chair Powell said that the rate hike stance will continue and that "it is necessary to maintain a restrictive monetary policy stance for some time thereafter."

Governor Lee evaluated that the recent rise in the won/dollar exchange rate is more due to the global strength of the dollar rather than speculative demand on the fundamentals of the Korean economy, and that the won/dollar exchange rate movements have not significantly deviated from the movements of major currencies so far.

He emphasized that while the depreciation of the won acts as inflationary pressure through rising import prices, it does not imply a problem with Korea's foreign currency liquidity.

Meanwhile, Governor Lee participated as a panelist in the 'Jackson Hole Economic Policy Symposium' on the same day.

He stated, "When deciding monetary policy at the July Monetary Policy Board meeting, only qualitative phrases were included in the official minutes, and specific forward guidance was presented at the press conference," adding, "We tried to provide the forward guidance that the market wanted while securing flexibility in future monetary policy operations."

This content was produced with the assistance of AI translation services.