Bank of Korea’s governor says some short-term rates have fallen more than expected

THE head of South Korea’s central bank said on Monday (Apr 24) some short-term interest rates had fallen more than he had expected, adding it was probably due to a shift in funds en masse in search of quick profit.

Bank of Korea governor Rhee Chang-yong also told reporters the central bank’s monetary policy tightening since late 2021 had had an effect when considering recent cooling trends in the real estate market and household borrowing.

“Interest rates for one- or three-month terms have fallen a little bit more than I had expected, and so, I think we need to look into it,” Rhee said when he stopped by the bank’s media office on the occasion of the completion of renovation work.

He did not say what the bank would do with short-term interest rates, which have fallen mainly on the widely held perception that the its tightening cycle is over as both inflation and economic growth have continued to soften.

He also said he did not expect US and South Korean leaders to discuss reviving a currency swap arrangement between their central banks at their summit later this week. REUTERS