SEOUL, April 28 (Reuters) – South Korea’s monetary policy board said a cautious, wait-and-see approach is appropriate for now as heightened uncertainty from the Iran war warrants more monitoring of its impact on growth and inflation, minutes from central bank’s previous meeting showed on Tuesday.
“While the focus has been on financial stability until the beginning of the year, I believe we should shift our focus to alleviating inflationary pressure for the time being,” one member said.
The Bank of Korea’s monetary policy board voted on April 10 to keep the benchmark interest rate unchanged at 2.50%, a move anticipated by all 31 economists polled by Reuters.
The hold reflects the bind the BOK finds itself in, with the economy caught between growth headwinds and an inflationary energy shock that could emerge to complicate any policy tightening ahead.
Among 30 analysts polled, 26 expected no change to the benchmark rate through the end of this year. Three forecast the policy rate to rise to 2.75% by year-end, while one expected it to reach 3%.
(Reporting by Cynthia Kim; Editing by Himani Sarkar and Jacqueline Wong)
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