July 27, 2018 / 6:17 AM / 10 months ago

Bank of Korea chief says rates need to be adjusted to secure policy room

FILE PHOTO: Bank of Korea Governor Lee Ju-yeol speaks during a news conference in Seoul, South Korea, November 30, 2017. REUTERS/Kim Hong-Ji

SEOUL (Reuters) - South Korea’s central bank chief said on Friday that interest rates need to be adjusted as the bank needs to secure greater policy head room to support the economy next year and beyond.

“To prepare for what’s to come next year and beyond, there may be a need to adjust the extent of policy accommodation to secure policy room,” Bank of Korea Lee Ju-yeol told lawmakers at a parliamentary session in Seoul.

Lee also said the economy’s continued growth near its potential rate also warrants some adjustments in interest rates.

South Korea’s central bank held its base rate steady at 1.50 percent KROCRT=ECI on July 12, as expected, but one board member’s dissenting vote may have raised the odds of a rate hike in coming months as major peers tighten monetary policy.

Reporting by Cynthia Kim; Editing by Shri Navaratnam

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