SEOUL, Sept 27 (Reuters) - A board member of South Korea’s central bank said on Wednesday that its current policy interest rate of 1.25 percent was “sufficiently” below the neutral rate for the economy.
“As noted in (the August rate decision) statement, I think current monetary policy is accommodative. So although the neutral interest rate has come down, the current benchmark interest rate is sufficiently lower than the neutral rate,” board member Shin In-seok said at a news conference in Seoul.
Shin said the neutral rate — a level that is deemed to be neither expansionary nor contractionary — is currently quite low by historical standards, but did not give policy implications for the bank’s monetary decision board.
Reporting by Cynthia Kim; Editing by Kim Coghill