Bank of Korea governor says inflation to near target in year after next
In short
Bank of Korea Governor Shin Hyun-song (신현송) said on 22 October that he expects inflation to reach the bank's target level around the year after next. He spoke to reporters after the bank held its base rate at 3.00%. He said the August forecast of 2.5% core inflation for next year looks somewhat low.
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Bank of Korea Governor Shin Hyun-song (신현송) said he expects inflation to reach the bank's target level around the year after next. Yonhap, Asia Economy, Newsis and Dong-A Ilbo all carried the remark. [ 1 , 2 , 4 , 5 ]
He spoke to reporters on 22 October after the bank kept its base rate at 3.00%. Shin said the August forecast of 2.5% core inflation for next year looks somewhat low and is likely to come in higher. He said the bank's target is 2%, and that the principle is to reach it within the policy horizon, taking other conditions into account, rather than immediately. He said next year is expected to be somewhat above the 2% target. [ 4 , 5 ]
Asked about the US Federal Reserve's rate decisions, Shin said he is watching them with particular interest. [ 4 , 5 ]
Newsis said the meeting of the bank's Monetary Policy Committee took place on 22 October at the bank in Jung-gu, Seoul. [ 4 ]
Why it matters
The remarks give the governor's view of when inflation may return to the bank's 2% target, in the same session in which the rate was left unchanged. The documents give no market reaction or further policy detail.
Key facts
- Bank of Korea Governor Shin Hyun-song said he expects prices to reach the bank's target level around the year after next. [ 1 , 2 , 4 , 5 ]
- The bank held its base rate at 3.00% on 22 October, after which Shin spoke to reporters. [ 4 , 5 ]
- Shin said the August forecast of 2.5% core inflation for next year looks somewhat low and that the figure is likely to come in higher. [ 4 , 5 ]
- Shin said the bank's target is 2% and that next year is expected to be somewhat above it. [ 4 , 5 ]
- Shin said he is watching the US Federal Reserve's rate decisions with particular interest. [ 4 , 5 ]
Confirmed by several sources
Still unclear
- How Shin's remark about the Fed's rate decision and the bank's own policy approach should be read. Only a brief quote is given in two outlets, without further explanation of what he meant.
- What higher core inflation next year would mean for the policy path. The documents give no figure for the new expectation and no guidance on future rate decisions.
What local media are saying
Timeline, local time
- Yonhap published a breaking-news item quoting the governor on prices nearing the target in the year after next. [ 1 ]
- Asia Economy published a similar breaking-news item. [ 2 ]
- Newsis published a report on his remarks after the rate hold. [ 4 ]
- Dong-A Ilbo published a report with the same content. [ 5 ]