(Refiles to fix spelling in headline)
SEOUL, June 12 South Korea's central bank chief
said on Monday that monetary policy needs to stay accommodative
to support the economy, but adjustments should be reviewed if
growth remains strong.
In a speech prepared for the Bank of Korea's 67th
anniversary, Governor Lee Ju-yeol said uncertainties remain high
and inflationary pressure isn't strong, which merits the bank to
maintain its current record-low interest rate of 1.25 percent
for the time being.
"For now, the accommodative stance in monetary policy needs
to be maintained. Having said that, if economic recovery
continues and shows clear signs of improvement, we may need to
adjust the pace of monetary policy easing so we will need to
thoroughly review such cases, Lee said.
The pace of economic growth is accelerating, Lee said, with
sharp improvement in exports and investment.
Soaring household debt and sluggish household income growth
are risks ahead, which could damp private consumption, he added.
South Korea's economy grew 1.1 percent in January to March
on a seasonally adjusted basis, its strongest in six quarters.
Most analysts believe the central bank will keep borrowing
costs unchanged for the rest of this year, before it considers
starting to normalise rates next year.
(Reporting by Cynthia Kim; Editing by Kim Coghill)