Lee Chang-yong "Increased Volatility During US Fed Rate Decisions... Strengthening Monitoring"

After Attending the Jackson Hole Meeting, "No Change in Currency Policy Direction"

[Image source=Yonhap News]

[Asia Economy Reporter Seo So-jeong] Lee Chang-yong, Governor of the Bank of Korea, reiterated his stance to continue the interest rate hike policy, anticipating that the high consumer price inflation will persist for the time being.

On the 30th, after attending the Economic Policy Symposium (Jackson Hole Meeting) held in Jackson Hole, Wyoming, USA, Governor Lee said regarding monetary policy operations, "Jerome Powell, Chair of the Federal Reserve (Fed), stated in his speech at this meeting that a large-scale (0.50?0.75 percentage points) policy rate hike will continue at the Federal Open Market Committee (FOMC) meeting scheduled for September 20?21," adding, "The main point was that the rate hike policy will continue until the inflation target level stabilization is confirmed."

Governor Lee emphasized, "This is not significantly different from what the Bank of Korea expected when deciding the base rate in August, so I would like to say that there is no change in the future monetary policy operation direction announced at that time."

However, he mentioned that there is a possibility of significant market volatility when the Fed decides on future policy rates.

Governor Lee added, "Since there is a high possibility that global financial and foreign exchange markets will experience repeated significant volatility as the Fed decides on policy rates for the time being, the Bank of Korea will continue to closely monitor the Fed’s policy rate decisions and their domestic and international impacts."

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