Most members of the Bank of Korea, during their rate decision meeting on February 22, expressed the view that it was premature to shift the monetary policy stance, according to the released minutes on Tuesday. The primary focus for policymakers remained on stabilizing prices.
One member emphasized the early stage for discussing a policy pivot, citing persistent high inflation expectations at 3%. The member cautioned against premature expectations, stating that careful consideration was needed.
The consensus among board members leaned towards addressing the negative impact of high-interest rates through micro measures. Factors such as household debt and housing prices were identified as considerations for a potential policy pivot.
In contrast, another member noted a reduction in the risk associated with easing the tightening measures. This assessment was based on a slight weakening of inflationary pressures, primarily attributed to sluggish domestic demand, as indicated in the minutes.
In the previous month, following the lead of central banks in the United States and Australia, the Bank of Korea aimed to temper investors' expectations of aggressive rate cuts. Despite keeping interest rates at a 15-year high, one of the seven members suggested keeping the possibility of a rate cut open in the next three months.
Paraphrasing text from "Investing" all rights reserved by the original author.
