BoK Governor nominee Shin says South Korea inflation is to accelerate and external risks pose uncertainty
Says:
- Sees upward pressure on prices and downward pressure on the economy.
- Risks may expand further and economic growth may weaken.
- To seek to stabilise prices and financial stability, and will work to internationalise the won.
- Monetary policy needs to act if there are prolonged inflationary pressures stemming from Iran war.
Context
The BoK governor nominee's comments reflect a hawkish tilt as he acknowledges accelerating inflation alongside potential economic downturns. His emphasis on proactive monetary policy in the face of external pressures indicates a shift in focus towards stabilizing prices, which may influence interest rate expectations and affect market sentiment towards South Korean assets. Overall, this points to increased volatility in the fixed income space as the market adjusts to these sentiments.
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