SoKor central bank maintains rates, may increase in November

The Bank of Korea held interest rates steady on Tuesday, taking a breather after its first hike in almost three years in August. However, the bank noted that further tightening could come as early as November to tackle rising inflation and household debt.

The South Korean central bank kept benchmark interest rates flat at 0.75% but increased its inflation forecast to the “mid-2% level” from 2.1% in August. The bank has an inflation target of 2%.

Citing the inflation, South Korean President Moon Jae-in said during a cabinet meeting on Tuesday that the government should make every effort to stabilize consumer prices.

In a news conference, Bank of Korea Governor Lee Ju-yeol stated that the bank can consider hiking interest rates in their next meeting if the economic recovery goes as expected, while also keeping an eye on how internal and external conditions affect the domestic economy and inflation. The central bank has taken a hawkish tone since May.

The country’s three-year treasury bonds futures dropped more than 0.40 points after Lee’s comment.