Financial institution of Korea governor says financial easing this 12 months might be versatile

SEOUL (Reuters) – South Korea’s central financial institution governor stated on Thursday the tempo of financial coverage easing would must be versatile this 12 months as a consequence of heightened political and financial uncertainty.

“This 12 months, situations surrounding our economic system might be tougher than ever earlier than,” Financial institution of Korea Governor Rhee Chang-yong stated in a New 12 months’s handle.

“Financial coverage must be operated with flexibility and agility, as political and financial uncertainty is unprecedentedly excessive,” Rhee stated.

The tempo of rate of interest cuts forward might be versatile, as trade-offs on development, inflation, international alternate and family debt are anticipated to widen, Rhee added.

At its remaining coverage assembly of 2024, the BOK delivered the primary back-to-back fee lower since 2009, as policymakers turned cautious on commerce dangers from the incoming U.S. administration of President-elect Donald Trump.

Rhee stated draw back dangers to the central financial institution’s financial development forecast of 1.9% for this 12 months have risen, citing uncertainty over U.S. commerce coverage and home politics.

On the gained, which weakened greater than 12% in 2024 to file the worst 12 months since 2008, Rhee stated volatility may persist for a substantial time frame.