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SEOUL, March 7 (Reuters) - Bank of Korea governor on
Tuesday said interest rate differences with the United States
are one of many factors affecting exchange rates and that recent
won weakness was due to dollar strength rather than domestic
rates being held last month.
"Foreign exchange rates are now more affected by changing
views on how long dollar strength would continue than the
interest gap with the United States," Rhee Chang-yong said at a
forum co-hosted by local broadcasters.
Rhee said it was too early to discuss rate cuts but that the
central bank would start to consider them should the inflation
rate fall toward 3% near the end of this year, providing
confidence that it is converging to the central bank's 2%
target.
South Korea's consumer inflation came in at 4.8% in
February, below expectations and at a 10-month low, bolstering
views that the central bank is done with its current policy
tightening cycle.
The BOK held interest rates last month, after a year of
uninterrupted hikes, and said the monetary tightening campaign
would not resume if inflation followed an expected path towards
moderation.
The won has rebounded 1.8% so far this month,
after dropping by nearly 7% against the dollar in February, the
biggest monthly loss in more than 11 years.
(Reporting by Jihoon Lee; Editing by Christopher Cushing and
Sam Holmes)
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