S. Korea signals adaptable easing pace

South Korea’s central bank governor Rhee Chang-yong stated on Thursday that the pace of monetary policy easing in the coming year would need to be adaptable in response to increased political and economic uncertainty.

“This year, conditions surrounding our economy will be more difficult than ever before,” Bank of Korea (BOK) governor Rhee said in a New Year’s address.

”Monetary policy needs to be operated with flexibility and agility, as political and economic uncertainty is unprecedentedly high.”

Rhee added that the pace of future interest rate cuts will be adaptable, considering the trade-offs between growth, inflation, foreign exchange, and household debt that are likely to increase.

In its last policy meeting of 2024, the BOK made its first consecutive rate cut since 2009 due to concerns about trade risks from the incoming US administration of President-elect Donald Trump.

Rhee noted that the central bank’s economic growth forecast of 1.9 per cent for this year faces increased downside risks due to uncertainties surrounding US trade policy and domestic politics.

Attribution: Reuters

Subediting: Y.Yasser