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Korea's key rate is below neutral rate: board member

South Korea's key rate is below neutral levels, a monetary board member said Wednesday, in the latest signal that the country's central bank could move to raise interest rates going forward.

Shin In-seok, a member of the BOK monetary policy board, made the assessment in a meeting with reporters, noting that the BOK's monetary policy is accommodative.

Earlier this month, BOK Deputy Governor Jeon Seung-cheol also made similar comments at an international conference in Seoul.
 
(Yonhap)
(Yonhap)

In August, the BOK kept its policy rate at an all-time low of 1.25 percent, though it has said that it may take a monetary tightening stance if the economy shows signs of robust recovery, a comment widely seen as signaling a rate hike by the central bank over the long haul.

Shin also voiced concerns about the increased economic uncertainty over North Korea risks and economic fallouts from a diplomatic row between South Korea and China.

Tensions have heightened on the Korean Peninsula as North Korean leader Kim Jong-un and US President Donald Trump traded a war of words over Pyongyang's nuclear and missile programs.

Trump said Tuesday he is "totally prepared" to use military options against North Korea. His latest warning came in response to North Korea's threat a day earlier to shoot down approaching American bombers, even in international air space.

China has carried out a series of economic retaliations against South Korea in protest of the deployment of an advanced US defense system in South Korea, adding to Seoul's woes.

Beijing has repeatedly pressed South Korea to withdraw the anti-missile defense system, claiming the deployment could hurt Beijing's security interests.

Shin said it is "difficult to be either optimistic or pessimistic" over South Korea's macroeconomic situation in the future, citing existing geopolitical risks. (Yonhap)
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