Outgoing BOK board member says no rush for rate cut

SEOUL, An outgoing monetary board member of the Bank of Korea said Tuesday that the central bank seems to be in no rush for potential rate cuts as inflation still runs high. Last week, the BOK kept its policy rate unchanged at 3.5 percent for the 10th consecutive time since February last year but said it is hard to predict a policy pivot during the second half of the year, as its current restrictive stance will be maintained for a sufficient period of time amid inflation uncertainties. The rate freeze took place as inflationary pressure in Asia's fourth-largest economy still remains high, while South Korea's economy has shown signs of a recovery in exports. "I think the central bank does not need to rush for a rate cut as its top priority is placed on price stabilization," Cho Yoon-je told reporters as his four-year tenure is set to end this week. Cho stressed that inflation should be brought down to the central bank's target of 2 percent. South Korea's inflation stayed over 3 percent for the second con secutive month in March on record prices of fruits and rising global oil prices. Consumer prices, a key gauge of inflation, rose 3.1 percent on-year last month, following a 3.2 percent increase the previous month. In January, inflation fell below 3 percent for the first time since July 2023, but high prices of fruits, farm produce and energy have caused inflationary pressure to flare up again. Recently, global oil prices have been around US$90 per barrel amid the Israel-Iran conflict, and inflation in the United States does not show signs of easing, which will prod the central bank to remain cautious in cutting rates. The BOK board member also said the won's decline against the greenback is not excessive enough to worry about as the local currency traded at a 17-month low amid the strengthening dollar. Source: Yonhap News Agency

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