South Korea’s central bank governor Shin says interest rates need to be increased
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Shin's comments add to signs the BOK is moving toward tightening as early as next month, with inflation running at a more than two-year high and the won under pressure. A hawkish BOK alongside elevated oil prices tied to the Middle East conflict could support KRW in the near term
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4 itemsSouth Korea's central bank ready to turn hawkish as chip boom masks inflation pressure
The Bank of Korea (BOK) is poised to shift towards a hawkish monetary policy stance, as indicated by senior deputy governor Ryoo Sang-dai's recent comments. With economic growth tracking at no lower than 2.0% and inflation above 2.2%, the BOK is likely to signal interest rate hikes at its upcoming meeting on May 28 under new governor Shin Hyun-song. Per the full note [source], the ongoing chip export boom provides a buffer against inflationary pressures, yet the won's weakness at 17-year lows complicates the inflation landscape. This sets the stage for a significant policy pivot that could influence regional FX dynamics.