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BOK official stresses efforts to tame inflation expectations amid rising prices

All News 11:34 June 23, 2022

SEOUL, June 23 (Yonhap) -- A senior central bank official on Thursday underscored the importance of preventing inflation expectations from rising as the country is grappling with rising prices amid high energy and commodity costs.

Bank of Korea (BOK) Deputy Gov. Lee Seung-heon voiced concerns that inflation pressure remains high for the time being, citing such factors as the ongoing war in Ukraine that has exacerbated supply-chain disruptions.

"Mandated to maintain price stability, the BOK should preemptively manage with a priority in its monetary policy on preventing rising prices from leading to unstable inflation expectations," he told a conference in Seoul.

South Korea is facing growing inflation pressure driven by a rebound in demand from the pandemic and high energy and raw material prices caused by global supply-chains disruptions.

In May, the country's consumer prices jumped 5.4 percent on-year, the fastest rise in almost 14 years and a pickup from a 4.8 percent spike in April.

To keep a lid on inflation, the BOK has hiked its policy interest rate five times since August last year, including a quarter percentage point rise last month. Market watchers expect more increases in the months to come.

Lee said that the BOK's preemptive action has helped inflation expectations stay relatively low compared with major economies but worried that price instability could drag on for a long period of time if people expect prices to rise going forward.

This undated photo provided by the Bank of Korea shows Senior Deputy Governor Lee Seung-heon. (PHOTO NOT FOR SALE) (Yonhap)

jwc@yna.co.kr
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