Before Deciding on a Large Rate Hike, BOK Chief Rhee says He Needs to keep an Eye on Inflation and the Foreign Exchan

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."

June 21, 2022 - 11:53 AM 253 views

Before Deciding on a Large Rate Hike, BOK Chief Rhee says He Needs to keep an Eye on Inflation and the Foreign Exchan

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© Before Deciding on a Large Rate Hike, BOK Chief Rhee says He Needs to keep an Eye on Inflation and the Foreign Exchan

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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."

Key Quotes

·         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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