Bank of Korea Links Future Rate Hikes to Financial Stability

The Bank of Korea will base the timing and pace of future interest rate hikes on assessments of inflation, economic growth, and financial stability. This follows a quarter percentage point increase in the benchmark interest rate to 3.00 per cent on August 27, which marked the second consecutive hike as inflation remained above target.

Board member Chang Yong-sung stated that geopolitical risks, global market trends, and accumulating financial imbalances will influence financial stability. To prevent these imbalances from deepening, Chang advocated for the complementary use of monetary and macroprudential policies. He also called for coordination with fiscal and financial authorities to provide support for vulnerable groups.