Bank of Korea Governor Shin Hyun-song said on the 12th that concerns over financial imbalances remain significant, driven by rising home prices in the greater Seoul area and growing household debt.
Shin made the remarks in opening comments at a parliamentary audit of government agencies held at the central bank's headquarters in Seoul's Jung-gu district. "We raised the base rate in two consecutive moves in July and August, taking into account the importance of preemptive action to prevent the spread of inflationary pressure and the continued need to watch for financial stability risks," he said.
"We plan to determine the timing and pace of any further increases while closely monitoring inflation, economic trends and financial stability conditions," he added.
On the economy, Shin projected that growth would remain solid, saying, "Exports and investment will continue to post strong gains, while the recovery in consumption gradually broadens on the back of improving income conditions."
On prices, he said inflation would "continue to run above the target level for a considerable period, as the pass-through of accumulated cost pressures persists and demand-side pressures gradually build."
Shin said the won-dollar exchange rate "has largely held steady after falling considerably, supported by solid economic fundamentals despite external uncertainties." He added that the central bank's won-denominated international payment network began a pilot run in September and is scheduled to start full operations in January next year.