SEOUL, Nov 9 (Reuters) - South Korea’s central bank said on Thursday that the economy was nearing its potential growth rate, with the expected rise in inflation supporting an adjustment of its easy monetary policy.
“Economic growth has picked up to the potential growth rate while inflation is expected to rise toward our target level, gradually allowing us to adjust monetary policy which has stayed accommodative to tackle low growth and low inflation,” the Bank of Korea said in its twice-yearly report on monetary policy .
The market consensus is that the BOK will raise interest rates for the first time in more than six years at its Nov. 30 meeting after the economy achieved its fastest growth for seven years in the third quarter.
The benchmark interest rate is at a record-low 1.25 percent, having been cut eight times since early 2012.
The bank will closely monitor the economy to assess whether current growth momentum can be sustained, the report said.
Reporting by Cynthia Kim; Editing by Eric Meijer