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FACTBOX-S.Korea c.bank chief remarks on rate policy
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FACTBOX-S.Korea c.bank chief remarks on rate policy
Reuters - Saturday, February 20
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SEOUL, Feb 19 - Investors have pushed back their expectations on the timing for an interest rate increase by South Korea's central bank, which has been changing its rhetoric on rate policy amid strong government pressure to keep borrowing costs low.
Following are key comments on policy made by Bank of Korea Governor Lee Seong-tae at news conferences held after the monthly monetary policy meetings since June last year:
JUNE 11, 2009
"The economic downturn has probably ended as aggressive stimulus policy measures helped boost output and support domestic demand. Construction activities have increased and consumption indicators showed improvement. Exports have risen slightly since February.
"I understand perceive the global economy has averted the worst scenario and thus central banks in major countries will increase interest rates sooner than expected." [ID:nSEO180843]
* * * *
JULY 9, 2009
"The economy has moved out of a slide due to aggressive fiscal and monetary policy measures but is not robust yet. Overall, economic activities have been out of the severe shock but have yet to return to strength.
"When to unwind easing policy depends on whether the economy will follow the expected path in the second half or take a different course." [ID:nSEO168776]
* * * *
AUG. 11, 2009
"It's true that policy direction for the near future is tilted toward tightening rather than easing.
"We're watching on increasing mortgage-backed loans and rising housing prices with considerable caution." [ID:nSEO46545]
* * * *
SEPT. 10, 2009
"Monetary policy decision makers should try to understand the opinion of people in the market or at the government. But the final decision on monetary policy belongs to us.
"Global economic conditions have turned better since the second quarter of this year. Domestic demand began to recover in the previous quarter." [ID:nSEO285454]
* * * *
OCT. 9, 2009
"The real estate market shows signs of moderating since mid-September. Stabilising property market should reduce the burden on monetary authorities.
"We don't decide rates only based on the property market situation. It's true that the property issue has been a major concern for us since the second quarter. the most important determinants are consumer prices and economy." [ID:nSEO186578]
* * * *
NOV. 12, 2009
"We are keeping a low-rate environment because it still has more benefits than harm for the economy ... The rate policy hinges on how much domestic demand can offset waning stimulus.
"The South Korean economy has grown relatively faster than other countries ... It's hard to say the global economic outlook is bright as major economies, including the United States, are not yet in a full recovery mode." [ID:nSEO186578]
* * * *
DEC. 10, 2009
"We should move near to the door for a timely exit. Now we are away from the door. Emergency measures were taken all of sudden but we can't exit in one big step ... The current 2 percent rate is too low given the 5 percent economic growth .
"We can't wait for a full recovery in the job market as some job losses are rather structural and employment data is lagging economic growth." [ID:nTOE5B807B]
* * * *
JAN. 8, 2010
"The monetary easing continues as long as the base rate stands at a level in support of the economy after considering the real-economic sectors, and raising interest rates itself is not a tightening.
"For now, I don't see clear signs yet that the low interest rates have led to excessive credit expansion and hurt the economy much. We're mindful of any risks that the low rates, combining with other factors, would trigger a problem and of whether we're able to fix it quickly." [ID:nTOE60703Y]
* * * *
FEB. 11, 2010
"Our economy has not fully returned to the normal orbit ... There has been no change in the view that the interest rate needs to be raised and normalised once the economy comes back to normalcy.
"I don't see any substantial adverse effect at present (of keeping rates ultra-low for a long time) and the chances of a surge in the threat over the coming months are not high." [ID:nTOE61A03J] (Reporting by Seo Eun-kyung; Editing by Yoo Choonsik & Kim Coghill)
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