June 21, 2022 - 11:53 AM 253 views
On Tuesday, the South Korean New Central Bank Governor Rhee Chang-yong said that, "Before determining whether a large step raise is required, they must study June inflation figures, the FX market, and other indicators."
· Until current inflationary pressures subside, monetary policy should be focused on stabilizing inflation.
· A widening interest rate divergence with the US might have a negative impact on the foreign exchange market and capital flows.
· If herd-like behavior is observed, the FX market will be stabilized.
· The June CPI is expected to be higher than the May statistics.
The Market Reaction
USD/KRW plummeted rapidly in response to the aforesaid comments, hitting daily lows of 1,287.91 before recovering to 1,289.55, where it now sways. On the day, the spot is down 0.25 percent.
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