SEOUL, Nov 27: South Korea’s finance minister said on Wednesday there’s no need for policy makers to consider an interest rate cut, dismissing a newspaper report that quoted a ministry official as saying a cut was needed to avert deflation.
‘We are not in a stage to consider an interest rate cut,’ a ministry official confirmed Minister Hyun Oh-seok as telling reporters while visiting the southeastern port city of Busan.
The Korea Economic Daily on Wednesday cited an unnamed finance ministry official as saying the ministry believes interest rates could be cut further.
The Bank of Korea, the central bank, decides on policy interest rates independently. But many investors believe its board members have often been strongly influenced by the government’s views on the economy and policy.
South Korea’s inflation has remained far below the bottom of the central bank’s target range for many months, stoking talk mostly from news media outlets that the economy risked deflation.
The central bank has kept its 7-day repurchase agreement rate unchanged at 2.50 percent over the past six consecutive months.
The economy has been gathering pace since posting no growth in the third quarter of last year and the unemployment rate is hovering near historic lows. The central bank and the government both expect inflation to pick up next year. (AGENCIES)
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