BOK chief voices need to keep restrictive monetary policy for long time

Bank of Korea Gov. Rhee Chang-yong said Thursday that monetary policy needs to stay restrictive for a long time, reaffirming the central bank's commitment to bringing inflation down.

Rhee said the BOK's "tightening stance needs to be maintained for a sufficiently long time, checking the monetary policy, inflation and financial stability data of major countries."

In a forum hosted by a business lobby for employers, Rhee said a "half-baked" rate cut may provide stimulus to sentiment for a rise in property prices.

Rhee also expected South Korea's economy to increase its recovery momentum on the back of rising exports, although private consumption is likely to remain sluggish.

South Korea's economy has been on a recovery pace since it contracted 0.3 percent in the fourth quarter of 2022 in the face of aggressive monetary tightening in major countries, escalating geopolitical tensions, rising household debt and an economic slowdown in China.

Earlier last month, the central bank froze its key rate for the eighth straight session amid woes over a still weak economic recovery and slower-than-expected inflation moderation but signaled that it may shift toward ending its restrictive stance.

The rate freezes came after the BOK delivered seven consecutive rate hikes from April 2022 to January 2023. (Yonhap)