South Korea central bank member sees no need for tightening soon after US hike

Pedestrians cross a road in front of the Bank of Korea headquarters in Seoul, South Korea. 

PHOTO: BLOOMBERG

NOV 26, 20152:23 PM

[SEOUL] South Korea's central bank does not necessarily have to consider raising its policy interest rate soon even if the US Federal Reserve delivers a lift-off next month, a Bank of Korea board member said on Thursday.

The US lift-off will indeed add a rate hike to the list of choices for the Bank of Korea to consider eventually, but it will take some time before it will actually begin thinking about that, Chung Soon-won told reporters. "Even if the United States (central bank) raises interest rates, it will take some time before the (Bank of Korea's) monetary policy committee needs to consider a rate hike unless the country's economic recovery becomes strong," he said.

Governor Lee Ju-yeol chairs the committee and Mr Chung is one of its seven members. The committee has kept the policy interest rate unchanged at a record low of 1.50 per cent since last cutting it by 25 basis points in June this year.

Mr Chung spoke on behalf of the committee.

The remarks came in response to speculation among some investors that the Bank of Korea will have to consider raising its interest rate soon after the Federal Reserve begins tightening policy, expected from next month.

REUTERS