The Bank of Korea: "US CPI Exceeds Forecast, Strengthening Monetary Tightening... Increased Uncertainty in Financial Markets"

[Asia Economy Reporter Seo So-jeong] The Bank of Korea forecasted that uncertainty in domestic and international financial markets will increase further as the U.S. September Consumer Price Index (CPI) exceeded expectations, leading the U.S. Federal Reserve (Fed) to strengthen monetary tightening.

On the morning of the 14th, the Bank of Korea held a 'Market Situation Review Meeting' chaired by Deputy Governor Lee Seung-heon to assess the international financial market situation following the U.S. CPI announcement and its impact on domestic financial and foreign exchange markets.

Deputy Governor Lee said, "The U.S. September consumer price inflation rate was 8.2%, exceeding market expectations, and the core consumer price inflation rate also expanded again to 6.6%, the highest level in 40 years. Overall, upward inflationary pressures remain significant and widespread."

According to the Bank of Korea, although interest rates rose due to strengthened expectations of Fed tightening, stock prices increased due to bargain hunting at low points and revised expectations regarding the UK government's existing tax cut plan, while the U.S. dollar showed high volatility with sharp fluctuations.

Deputy Governor Lee emphasized, "In the international financial market, expectations that the Fed will strengthen monetary tightening to respond to high inflation have spread, and accordingly, uncertainty in domestic and international financial markets is expected to increase further. We will continue to closely monitor changes in the financial and foreign exchange markets and promptly implement market stabilization measures if market volatility expands significantly."

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