SEOUL, June 13 (Reuters) - South Korea’s central bank chief on Tuesday said the bank will coordinate with the government and share its assessment on the economy, a day after the bank gave its first signal it may consider raising interest rates if the economy continues to improve.
“As the Bank of Korea conducts monetary policy, we will share our understanding of the economy and closely coordinate with the government as we make makes appropriate policy suggestions, so that we can contribute to the overall economic development,” Governor Lee Ju-yeol said at a meeting with the new finance minister Kim Dong-yeon in the bank’s headquarter in central Seoul.
While the bank’s independence to set monetary policy is guaranteed by law, the government has a long track record of pressuring the central bank to cooperate on policy direction.
Lee cited the U.S. Federal Reserve’s interest rate hikes, soaring household debt and high youth unemployment as risks to growth, although recovery sentiment has been improving thanks to a robust exports.
Lee on Monday gave his first signal that the central bank may consider raising interest rates if the economy shows signs of a robust recovery..
The BOK’s current interest rate is at a record low of 1.25 percent.
Reporting by Cynthia Kim; Editing by Michael Perry