Shin Hyun-song Governor: "Maintaining the interest rate hike trend is reasonable to curb core inflation"

Governor Shin Hyun-song of the Bank of Korea suggested that additional rate hikes within this year are likely, stating, "I believe maintaining the trend of raising the base rate is the most reasonable approach to curb core inflation."

At the National Assembly's Budget and Accounts Committee briefing on the 29th, when Democratic Party of Korea lawmaker Yoon Hu-deok asked whether additional base rate hikes would occur within this year, Governor Shin responded, "The timing and extent of any increase will depend on data we receive in the future and the state of the economy," thereby confirming his stance.

On inflation assessment, he reaffirmed his position that core inflation, which reflects underlying price trends, is more important than consumer prices, which reflect temporary shocks. Governor Shin stated, "The June consumer price inflation rate rose to 3.2% due to short-term shocks, but we place greater importance on core inflation, which reached 2.5% in May."

He added, "While there is cost-push inflation, strong growth driven by economic prosperity continues to create demand-side price pressures."

In his earlier opening remarks at the committee briefing, Governor Shin emphasized, "Prices remain uncertain amid international oil price fluctuations due to the Middle East situation. The effects of previously elevated costs and exchange rates persist, and demand-side pressures from income improvements are gradually expanding. As a result, prices are expected to continue rising above the target level for a considerable period."