BOK board members see inflation pressure rise: minutes

김덕현 / 2021-06-15 16:39:08
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BOK board-May minutes

BOK board-May minutes

BOK board members see inflation pressure rise: minutes

SEOUL, June 15 (Yonhap) -- Some members of the central bank's rate-setting board saw inflationary pressure rise amid an economic recovery and the Bank of Korea (BOK) needs to review the timing of normalizing pandemic-era easing of monetary steps, minutes showed Tuesday.

In the rate-setting meeting on May 27, the seven-member board unanimously voted to keep the policy rate at a record low of 0.5 percent to underpin an economic recovery from the pandemic.

According to the minutes, inflation expectations may pick up in the second-half of this year and the first-half of next year as the economy is on a recovery track.

"The notable point is that core inflation is expected to reach some 2 percent in the second-half and the first-half of next year," a board member said.

Another member said surging commodity and energy prices are threatening to stoke higher inflation.

However, most members agreed that the BOK must maintain the current easing of monetary policy for the time being as uncertainty persisted given the speed of the vaccine rollout and a flare-up in COVID-19 cases.

Last month, the BOK sharply raised its 2021 growth outlook to 4 percent, higher than its February estimate of 3 percent.

The BOK has raised its forecast on inflation to 1.8 percent this year, compared with its earlier forecast of 1.3 percent.

BOK Gov. Lee Ju-yeol has said South Korea will prepare for an "orderly" exit from the pandemic-era monetary easing if economic recovery remains solid.

The timing of normalization will depend on the pace of economic recovery, the situation of COVID-19 and risks of financial imbalances, Lee said.


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