Bank of Korea Governor Lee Ju-yeol speaks at a press conference after the Monetary Policy Direction Decision Meeting held at the Bank of Korea in Jung-gu, Seoul last month. Provided by the Bank of Korea
Amid growing concerns about inflation, especially in the US, Bank of Korea Governor Lee Ju-yeol reaffirmed his previous position that “(domestic) inflation is unlikely to continue to expand.” However, it is expected that this year’s inflation rate and economic growth rate will be higher than the previous forecast.
In a written response to major issues on the 24th, Governor Lee said, “If the corona infection situation quickly subsides and the demand that has been suppressed so far erupts, inflation may temporarily increase.” It doesn’t seem to be big,” he said.
However, Governor Lee predicted that in the second quarter of this year, consumer inflation could rise to the high 1% range due to the base effect and increased consumption.
He emphasized, “It is expected to be higher than the previous forecast (1.3%) for the year as a whole, but it is still expected to fall below the target price stabilization level (2%).”
Governor Lee predicted that this year’s forecast for economic growth will also be higher than the previous forecast (3.0%).
He said, “As the supply of vaccines gradually expands amid expanding macro-policies in major countries, expectations for a global economic recovery are rising.” “If the supplementary administration is implemented, it will act as a factor to further increase the growth rate this year.”
Governor Lee, however, refrained from commenting specifically on the correction of the growth rate forecast, saying, “I will tell you at the next economic outlook.”
Recently, as raw material prices and grain prices have soared, table prices are on the high, and energy and utility bills are showing signs of rising. The photo shows a gas station in downtown Seoul on the 12th. News 1
The possibility of an early rate hike was also denied in a relatively firm tone.
He emphasized, “It is expected that the economic growth trend will expand more than the previous forecast, but the real economy activity is still not reaching its potential level.”
It also maintained the existing position that cryptographic assets such as bitcoin cannot function as currency such as payment means.
Governor Lee said, “Cryptographic assets are limited in functioning as a means of payment or value storage due to high price volatility. In particular, when the central bank digital currency (CBDC) is introduced, the demand for cryptocurrency as a means of payment is expected to decrease. “He said.
The question-and-answer on the day was held to hear President Lee’s opinion on the current issues for the month of March, when there was no meeting to determine the monetary policy direction of the Financial Monetary Committee of the BOK, which determines the standard interest rate. It is because there is a growing awareness that the market conditions in the US and Korea are changing rapidly to wait until the next meeting to be held on the 15th of next month.
Governor Lee said, “As the market expectations for the Fed’s monetary policy are adjusted from time to time according to the direction of various economic indicators released in the future, the volatility of the financial market may expand.” We will take care not to cause shock or confusion by communicating smoothly with the market regarding the direction of operation.”
Kwak Joo-hyun reporter [email protected]
News directly edited by the Hankook Ilbo can also be viewed on Naver.
