"External factors have stabilised and it allows us to independently look at domestic conditions and inflation here for monetary policy setting.” Rhee said. — Reuters
SEOUL: South Korea’s central bank governor Rhee Chang-yong says he agrees with the view that the odds of interest rate cuts by the US Federal Reserve (Fed) are rising, and such a pivot offers South Korean policymakers a chance to focus on domestic conditions.
“(Financial markets) took it as a dovish move when (Fed chair Jerome Powell said) they discussed interest rate cuts,” Rhee told a press conference on the country’s inflation outlook on Wednesday.
“With that, external factors have stabilised and it allows us to independently look at domestic conditions and inflation here for monetary policy setting.”
The Bank of Korea (BoK) sees consumer inflation easing towards a 2% medium-term target level by the end of 2024, although supply-side factors such as global oil prices remain as an uncertainty to the outlook.
The BoK has been trying to tame speculation over an early policy pivot as it held its key interest rate at 3.5% on Nov 30 after raising them by 300 basis points in the current cycle.
Economists see its next move as a downward one some time in the second half of 2024, and the outlook on US interest rates has helped strengthen such a view. — Reuters
