Bank of Korea says curbing inflation remains main rate policy target in 2023

SOUTH Korea’s central bank said on Friday (Dec 23) it’s interest rate policy next year would continue to target containing inflation, which it said is expected to slow through a huge amount of uncertainty lies ahead.

“The Bank of Korea will continue to conduct its monetary policy with a focus on price stability so that consumer price inflation will move towards the target level of 2.0 per cent,” it said in an annual policy statement, required by law.

It has said inflation would fall to 3.6 per cent in all of next year after hitting 5.1 per cent this year, the highest since 1998, but saw it hovering around 5 per cent in the early part of 2023.

It has lifted the policy rate by 275 basis points since late last year in nine steps to 3.25 per cent and is widely expected to be finishing its tightening cycle this year, earlier than some other central banks.

In Friday’s statement, it said it would decide on the final rate in the cycle and how long to stay there after taking into account inflation, economic growth and financial and foreign exchange market situations. REUTERS