On the won's weakness, Rhee said a currency swap with the
U.S. Federal Reserve was not the appropriate option at present
as the currency's weakness was related to the differences in
interest rate policies between the two countries.
(Reporting by Choonsik Yoo and Jihoon Lee; Editing by Christian
Schmollinger and Jacqueline Wong)
(Adds quote, other remarks)
INCHEON, South Korea, May 3 (Reuters) - South Korea's
central bank chief welcomed an easing in inflation but said it
was "a little bit premature" to suggest it will start to cut
rates as early as this year given that inflation is still above
its policy target.
Bank of Korea Governor Rhee Chang-yong also said during an
interview with CNBC TV that the pressure on the won currency from U.S. monetary policy tightening was now expected
to soften in step with the slowing pace of rate hikes there.
South Korea's central bank started raising interest rates
ahead of its peers in August 2021 and increased the policy rate
by 300 basis points from a record low of 0.50%. Rhee said it was
the "right time to assess the accumulated effect".
The Bank of Korea held interest rates steady at the last
two meetings. It next reviews policy on May 25. The BOK has an
official annual inflation target of around 2%.
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