Asia

Asia

Bank of Korea governor says policy guidance harder with won's weakness

15 October 2022 19:20 (UTC +04:00)

South Korea's central bank governor said on Saturday external factors, such as aggressive U.S. policy tightening buoying the dollar and driving the won currency sharply down, made providing forward guidance on policy difficult, APA reports citing Reuters.

The Bank of Korea delivered its second-ever 50-basis-point rate hike on Wednesday and made clear the won's 6.5% slide in September that drove up import costs played a key role in the decision.

The Korean won depreciated more rapidly in September in the face of the U.S. Fed's accelerated tightening," Governor Rhee Chang-yong told the Peterson Institute for International Economics in Washington D.C. according to a transcript released by the central bank.

After its first 50-basis point rate rise in July, the central bank said a return to its usual quarter-point pace "looked appropriate for the time being" only to change tack last month given expectations of further U.S. Federal Reserve tightening.