Federación (shanghai, editor) post-empire central bankMonetary policyThe republic of korea, which is known as the “global economy canary”, has been at the forefront of the “competitive” shift. On friday (14 january), the central bank announced an increase in the base rate by 25 basis points to 1. 25 per cent, making it the first asian central bank to raise interest rates in the year。
This increase was the third time that the central bank of korea raised interest rates in six months, and was announced at two consecutive meetings after november. At present, the central bank of korea's benchmark interest rates have returned to pre-epidemic levels。
The central bank of korea has been at the forefront of a gradual reduction in large-scale stimulus measures by central banks around the world, whose goal is to curb rising prices. Over the past two years, central banks, governments and international financial institutions have injected trillions of dollars into the global economy to help mitigate the impact of the new coronary epidemic。
In its statement, the central bank of korea stated that the country's economic growth path was consistent with previous estimates, that consumer inflation would remain within 3 per cent for a period of time, that appropriate adjustments to the degree of policy easing would continue in the future and that further adjustments would depend on the effect of interest rates。
The governor of the central bank of korea, li jianjian, said after the conference that interest rates were still relaxed despite today’s hike. Policy interest rates, even if they reach 1. 5 per cent, cannot be considered as “restrictive, and the current rates remain below neutral levels. He added that “the interest rate hike by the central bank predates the fed's actions, which gives us greater space”
Earlier, 14 of the 19 economists surveyed by bloomberg were expected to reach the decision of the central bank of korea to increase interest rates, while others were expected to remain at large. The decision on the interest rate of the central bank of korea was not fully adopted and committee member joo sang-yong voted against it。
After the korean central bank announced an increase in interest rates, korea’s combined stock price index (kospi) suffered a marked downfall on friday’s early drive, with the deadline for the release of the paper falling by 39. 07 points, or 1. 32 per cent, to 2,922. 93 points, threatening to achieve the largest single-day fall since 20 december. The index is expected to fall for the fourth consecutive week。
Analysts point out that the central bank of korea may still be aiming at resolving this increase in benchmark ratesInflation“financial imbalances” such as increased loans to residents and higher asset prices. As the overall cpi in korea jumped to 2. 5 per cent in 2021, rising inflation increased pressure on south korean policymakers to act, the fastest increase in prices since 2011。
With regard to the epidemic, since the peak of december, the number of new cases of the new coronary virus in south korea has fallen on a daily basis, which has also helped to create a window of opportunity, an opportunity that li jianjian apparently intends to seize before the end of his mandate in march and the presidential election that same month。
