ID :
38251
Wed, 12/31/2008 - 10:15
Auther :
Shortlink :
http://m.oananews.org//node/38251
The shortlink copeid
BOK chief vows to prioritize economic recovery next year
SEOUL, Dec. 31 (Yonhap) -- South Korea's central bank will focus its 2009
monetary policy on bolstering the fast slowing economy as inflationary pressure
is expected to ease, its chief said Wednesday.
The Korean economy is feared to lose momentum sharply next year as the deepening
global economic downturn is widely expected to further hit exports, or the
mainstay of its growth. Most analysts predict economic growth will fall to the
1-percent range.
"The central bank will positively act to prevent financial market jitters from
sharply slowing the real economy by checking the effectiveness of (recent) policy
rate changes," Bank of Korea (BOK) Gov. Lee Seong-tae said in his New Year's
message.
Since early October, the BOK has cut its key interest rate by a combined 2.25
percentage points to an all-time low of 3 percent in a bid to prop up the cooling
economy, hit by the U.S.-sparked global financial crisis.
Lee's remarks are widely seen as hinting that the central bank may carry out more
interest rate cuts in the coming year to keep Asia's fourth-largest economy from
going into freefall.
The South Korean economy grew 0.5 percent in the third quarter from three months
earlier, the weakest growth in four years, as exports lost steam amid sluggish
domestic demand. Exports, which account for about 60 percent of the country's
economy, have already showed signs of slowing as a global recession has begun to
spill over into emerging markets.
The BOK predicted that Asia's fourth-largest economy will grow a mere 2 percent
next year, down from an estimated 3.7 percent advance for this year.
Meanwhile, South Korea's consumer prices grew 4.5 percent on-year in November,
the slowest in seven months, on falling oil prices. The BOK aims to keep annual
inflation between 2.5 and 3.5 percent until 2009.
Lee pledged to ease a credit crunch by supplying liquidity to the financial
system in a timely manner as there is a chance that the squeeze would continue
amid uncertainty surrounding the global financial market and a global economic
slump.
"The BOK will make efforts to induce funds into smoothly flowing to the
liquidity-squeezed sector by actively tapping open market operations and the
bank's low-rate loans earmarked for smaller firms," he added.
Since the mid-September collapse of Lehman Brothers Holdings Inc., the BOK has
pumped 19.5 trillion won (US$14.5 billion) in the local currency liquidity into
the financial system.
sooyeon@yna.co.kr
(END)
monetary policy on bolstering the fast slowing economy as inflationary pressure
is expected to ease, its chief said Wednesday.
The Korean economy is feared to lose momentum sharply next year as the deepening
global economic downturn is widely expected to further hit exports, or the
mainstay of its growth. Most analysts predict economic growth will fall to the
1-percent range.
"The central bank will positively act to prevent financial market jitters from
sharply slowing the real economy by checking the effectiveness of (recent) policy
rate changes," Bank of Korea (BOK) Gov. Lee Seong-tae said in his New Year's
message.
Since early October, the BOK has cut its key interest rate by a combined 2.25
percentage points to an all-time low of 3 percent in a bid to prop up the cooling
economy, hit by the U.S.-sparked global financial crisis.
Lee's remarks are widely seen as hinting that the central bank may carry out more
interest rate cuts in the coming year to keep Asia's fourth-largest economy from
going into freefall.
The South Korean economy grew 0.5 percent in the third quarter from three months
earlier, the weakest growth in four years, as exports lost steam amid sluggish
domestic demand. Exports, which account for about 60 percent of the country's
economy, have already showed signs of slowing as a global recession has begun to
spill over into emerging markets.
The BOK predicted that Asia's fourth-largest economy will grow a mere 2 percent
next year, down from an estimated 3.7 percent advance for this year.
Meanwhile, South Korea's consumer prices grew 4.5 percent on-year in November,
the slowest in seven months, on falling oil prices. The BOK aims to keep annual
inflation between 2.5 and 3.5 percent until 2009.
Lee pledged to ease a credit crunch by supplying liquidity to the financial
system in a timely manner as there is a chance that the squeeze would continue
amid uncertainty surrounding the global financial market and a global economic
slump.
"The BOK will make efforts to induce funds into smoothly flowing to the
liquidity-squeezed sector by actively tapping open market operations and the
bank's low-rate loans earmarked for smaller firms," he added.
Since the mid-September collapse of Lehman Brothers Holdings Inc., the BOK has
pumped 19.5 trillion won (US$14.5 billion) in the local currency liquidity into
the financial system.
sooyeon@yna.co.kr
(END)
