His remarks came after the central bank unanimously decided to keep interest rates unchanged at 3.50% for the 18th straight month, the longest streak of unchanged interest rates since a 25-basis-point (bp) hike in January of last year.“Two out of six members (on the Monetary Policy Board), excluding me, think that we should leave open the possibility of lowering the base interest rate within the next three months.”The other four expressed the opinion to leave rates at 3.5% for the next three months, Rhee added.
FINANCIAL STABILITYThe BOK is now taking more consideration of financial market stability over inflation in determining the timing of its first rate cut in four years.“Although much progress has been made in stabilizing inflation, there is a need to further monitor the foreign exchange market, rising housing prices and household debt growth,” Rhee noted.
Its seven rate-setting committee members shared the view that excessive liquidity supply or sending a wrong signal of a rate cut timing could trigger housing price hikes.“A majority of monetary policy board members believe the current market expectations for a rate cut are overdone, considering current prices and financial market conditions,” said the governor.
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