Credit: Public domain.
On January 16, the Bank of Korea 한국은행 announced that the benchmark interest rate will remain at 3.00% per annum. Lee Chang-yong 이창용, governor of South Korea’s central bank, said the rate “should have been lowered, if economic vitality were the only factor we were concerned about,” noting that the country’s domestic consumption is falling faster than expected. (See previous coverage, “The Calm Before Calamity.”)
Nevertheless, Lee noted other factors, including the high USD-KRW exchange rate amid political uncertainty following Yoon Suk-yeol’s coup attempt, and the consequent rise in consumer prices, that mandate caution on the part of the central bank in lowering interest rates.
