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BOK Governor: Global Oil Prices to Weigh on Rate Decision

Written: 2024-04-19 15:35:37Updated: 2024-04-19 15:37:33

BOK Governor: Global Oil Prices to Weigh on Rate Decision

Photo : YONHAP News

Bank of Korea(BOK) Governor Rhee Chang-yong says global oil prices will be the biggest factor in deciding whether to lower the base interest rate.
The BOK chief made the remarks on Thursday during his visit to the United States to attend the Group of 20(G20) meetings of finance ministers and central bank governors, as well as the 2024 Spring Meetings of the International Monetary Fund(IMF) and the World Bank Group(WBG).
Rhee added that the most important issue will be whether or not global oil prices remain below 90 U.S. dollars a barrel or rise above it. 

He explained that the BOK will also have to see if the consumer price index(CPI), which currently stands at three-point-one percent, falls below the mid-two percent range before reviewing whether the central bank will make rate cuts in the second half of the year.
Rhee also suggested a BOK intervention regarding the ongoing currency exchange volatility because he judged that the recent won depreciation was "excessive."
He added he considered it to be a reasonable move as many external factors overlap, such as the Israel-Iran conflict, rising global oil prices, and growing expectations that the interest rate cut by the U.S. Federal Reserve will be delayed.

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