Bank of Korea (BOK) governor sees monetary policy still accommodative

BOK governor sees monetary policy still accommodative

The Bank of Korea (BOK) Governor Kim Choong-soo said Friday the central bank’s current monetary policy remained accommodative, indicating the bank would sustain its interest rate normalization policy from the long-term perspective.

“There is no change in our view that the current monetary policy remains accommodative. No change has been made in our basic principle. Our policy will be adaptive to a change in external conditions,” Kim told reporters after the November rate-setting meeting.

The BOK left the 7-day repo rate unchanged at 3.25 percent, citing downside risk factors such as Europe’s debt crisis. The bank kept its rate freeze stance for the fifth consecutive month.

Asked about the possibility for rate cut, Kim said he recognized the rate-cutting movement by some monetary authorities such as Australia and Indonesia, but the governor repeated that there existed respective policy factors that should be considered for monetary policy such as different economic situation and inflation.

Global monetary stance has recently loosened. The European Central Bank (ECB) cut its policy rate last month, and the U.S. Federal Reserve mentioned additional stimulus measures, including mortgage-backed securities (MBS) purchases. The Bank of Japan (BOJ) widened yen supply to stem the currency’s rise against the U.S. dollar, while Australia, Indonesia, Brazil, Turkey and Israel shifted its monetary policy to an easier direction.

Touching on a surge in Italy’s borrowing costs, Kim stressed that the Italian event had a smaller impact on the local financial market than the one after the global financial crisis, saying it was mainly due to various macro-prudential measures as well as an extension of swap lines with Japan and China.

Editor: Yang Lina

English.news.cn   2011-11-11 13:37:43    FeedbackPrintRSS
SEOUL, Nov. 11 (Xinhua)

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Posted by news on 12 November 2011. Filed under Asia Top Stories, Economy, Latest World News, Top Stories Worldwide. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.