South Korea's central bank chief said Thursday that the latest interest rate hike in the United States will have little impact on the South Korean market.
"The U.S. Federal Reserve's decision met market expectations, and as a result, the U.S. market remained steady," Bank of Korea (BOK) Gov. Lee Ju-yeol told reporters before attending an emergency meeting with officials in Seoul. "In South Korea, I expect that the financial market will have little impact from the Fed's decision."
The U.S. central bank raised its policy rate to 1.50-1.75 percent on Wednesday as widely expected and has plans to increase the rate two more times within the year.
Lee said the Fed will likely maintain its rate hike schedule for 2018, but its tone may have become hawkish.
"For next year, the Fed may speed up its tightening approach. I think the decision at the Federal Open Market Committee can be interpreted as being more hawkish," he said.
He said the central bank will keep closer tabs on the financial and economic issues at home and abroad, and seek the best timing to lift the rate from 1.5 percent as South Korea has a lower base rate than that of the U.S. for the first time in more than 10 years.
The BOK is scheduled to hold its monetary policy meeting in May.
"We have to check many things before setting the timing of a rate increase," said Lee, adding that the BOK will issue a revised GDP forecast next month.
The top banker has stressed that he will keep the monetary policy accommodative for a while as Asia's fourth-largest economy has been experiencing a lukewarm recovery and low inflation pressure.
Lee will start his second four-year term in April as his reappointment was approved by the National Assembly on Wednesday.
Kim Su-a firstname.lastname@example.org
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