Bank of Korea Policy Member: Will Assess Conditions to Determine Pace and Timing of Tightening

Kim Jong-hwa, a policy member of the Bank of Korea, said on Thursday that the central bank will assess the domestic and external policy environment, including the impact of its previous two rate hikes, to determine the timing and pace of further monetary tightening. According to Sina Finance, he said in the Bank of Korea's semiannual monetary policy report that it is necessary to assess changes in domestic and overseas conditions to decide when and how quickly to raise rates further. He said economic growth will remain strong and inflation will stay above target for a considerable period, citing price pressures from the Middle East conflict and the export boom as the most important factors. He added that the central bank will also closely monitor the effects of the previous two rate hikes. The report said global AI investment has been a driver of South Korea's semiconductor export boom and is expected to keep expanding for a long time amid rising demand and intensifying competition. Last month, the Bank of Korea raised its benchmark rate by 0.25 percentage point to 3.00%, its second consecutive hike, as inflation remained above target and financial stability risks persisted.