Forget about rate cut, says Minister Oh

Korea’s finance minister said yesterday 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 cited an unnamed finance ministry official as saying the ministry believes interest rates could be cut further.

The Bank of Korea 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.

Korea’s inflation has remained far below the bottom of the central bank’s target range for many months.
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 unemployment is hovering near historic lows.

Reuters