South Korea delivers another big hike as U.S. Fed rates sink local currency

Record ID: 1692957

  • Title: South Korea delivers another big hike as U.S. Fed rates sink local currency
  • Date: 12th October 2022
  • Summary: SEOUL, SOUTH KOREA (OCTOBER 12, 2022) (REUTERS) ***WARNING: CONTAINS FLASH PHOTOGRAPHY*** BANK OF KOREA GOVERNOR, RHEE CHANG-YONG, TAKING SEAT AT NEWS CONFERENCE JOURNALISTS AT NEWS CONFERENCE, JOURNALIST ASKING QUESTION NEWS CONFERENCE IN PROGRESS (SOUNDBITE) (Korean) BANK OF KOREA GOVERNOR, RHEE CHANG-YONG, SAYING: “The Monetary Policy Board of the Bank of Korea decided today to raise the Base Rate by 50 basis points, from 2.50% to 3.00%.” JOURNALISTS SEATED NEWS CONFERENCE IN PROGRESS (SOUNDBITE) (Korean) BANK OF KOREA GOVERNOR, RHEE CHANG-YONG, SAYING: “Upside risk to consumer price inflation, which is expected to persist in the high range of 5-6% for a considerable time, has increased as a result of a rise in the exchange rate. And market expectations for a rise in the exchange rate have acted in part as a financial instability factor by increasing capital outflow pressure and causing herd behavior in the foreign exchange market. Considering that, we judged that it is necessary to strengthen policy responses.” JOURNALISTS SEATED RHEE SPEAKING NEWS CONFERENCE IN PROGRESS
  • Embargoed: 26th October 2022 06:00
  • Keywords: BOK Bank of Korea Rhee Chang-yong Seoul South Korea inflation interest rates monetary policy
  • Location: SEOUL, GYEONGSAN, SOUTH KOREA
  • City: SEOUL, GYEONGSAN, SOUTH KOREA
  • Country: South Korea
  • Topics: Asia / Pacific,Government/Politics
  • Reuters ID: LVA001163312102022RP1
  • Aspect Ratio: 16:9
  • Story Text: South Korea's central bank on Wednesday (October 12) raised interest rates by a half percentage point and flagged more policy tightening as authorities scrambled to hose down red-hot inflation, caused in large part by a surging U.S. dollar and higher import prices.
    The Bank of Korea (BOK) raised its benchmark policy rate by 50 basis points to 3.00% on Wednesday, bringing total rates hike since August last year to 250 basis points.
    The U.S. Federal Reserve's three 75-basis-point hikes have propelled a dollar rally against most other currencies, forcing policymakers around the world to review the risk of fresh inflation pressure and capital outflows.
    The BOK said it sees upside risks to its August inflation projection for this year at 5.2%, which warrants continued rate hikes. The won's 17% slump this year could fuel consumer price gains by making imports more expensive.
    (Production: Dogyun Kim, Hyunyoung Yi)
  • Copyright Holder: REUTERS
  • Copyright Notice: (c) Copyright Thomson Reuters 2022. Open For Restrictions - http://about.reuters.com/fulllegal.asp
  • Usage Terms/Restrictions: None
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