South Korea’s central bank has said it will continue its monetary-tightening stance for a considerable period of time to stabilise consumer prices.
The Bank of Korea (BOK) disclosed this on Thursday that its monetary policy report to the National Assembly, that the headline inflation was expected to stay high far above BOK’s inflation target of two per cent.
It said domestic economic growth would be lowered.
BOK noted that it will continue its monetary-tightening stance for a considerable period of time while focusing on consumer price stability and reviewing the need to raise interest rates further.
The central bank has lifted its benchmark interest rate since August 2021 by 3.0 percentage points to 3.50 per cent.
The country’s consumer prices advanced 4.8 per cent in February from a year earlier, after hovering above 5.0 per cent for the past nine months.
BOK said South Korea’s consumer prices remained higher than those in major economies, on the back of hikes in public utility rates, such as electricity and natural gas charges, and the adjustment in fuel taxes.
The bank added that supply-side inflationary pressure continued to weaken on lower prices for crude oil and grain.