BOK Chief Rhee: Need to monitor inflation, FX market before assessing a big rate hike

Dhwani Mehta FXStreet

South Korea's new central bank governor Rhee Chang-yong said on Tuesday, “they need to monitor June inflation data, FX market and other data before assessing whether a big step hike is needed.”

Additional quotes

Monetary policy should focus on stabilizing inflation until current inflationary pressure eases.

Widening interest rate differential with the US could adversely impact FX market, capital flows.

Will act to stabilize FX market if herd-like behaviours seen.

June CPI likely to be higher than may data.

Market reaction

In a knee-jerk reaction to the above comments, USD/KRW dropped sharply to hit daily lows at 1,287.91 before recovering to 1,289.55, where it now wavers. The spot is down 0.25% on the day.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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