SEOUL, Jan 22: South Korea’s central bank governor said that Seoul is keeping a close eye on fluctuations in financial markets sparked by rate cuts in Canada, Denmark and Switzerland.
‘The volatility has not affected us much yet, but we are keeping a close eye on markets and especially the European Central Bank’s decision,’ Bank of Korea Governor Lee Ju-yeol also told reporters at a press briefing in Seoul on Thursday. He said that temporary market volatility has been heightened by recent divergence in monetary policy in countries around the world.
Lee added that recent rate cuts by the BOK will take some time to show up in the economy given the lags between actual policy moves and the effect on credit conditions. ‘Our monetary policy is more accommodative now after the two cuts last year and there is a time lapse between the actual moves and the effects thereafter,’ Lee added. ‘Although our growth forecast was cut to 3.4 percent, this does not indicate that we are pessimistic about the economy.’
(AGENCIES)
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