Bank of Korea board member Moon Woo Sik sees no immediate need to alter benchmark interest rates and says it’s “too early” for any central-bank response to the yen’s slide against the won.
“There are good reasons why people tend to be more optimistic this year than last year,” Moon, 52, said in an interview in Seoul last week. There’s no “important reason to take monetary-policy actions quickly” unless the South Korean economy declines further, he said.
Central bank policy makers meet Feb. 14 to set rates as Hyundai Motor Co. and Samsung Electronics Co. grapple with won gains and the likelihood of economic and fiscal policy shifts after the Feb. 25 inauguration of President Park Geun Hye. Moon says business confidence and investment may gain in South Korea as risks recede from Europe’s debt crisis and the so-called fiscal cliff of spending cuts and tax increases in the U.S.
Policy makers need to “wait and see” as South Korea’s economy shows signs of improving after already hitting bottom, Moon said. “I don’t think we’re in a very urgent situation.”
The won extended gains after Moon’s comments, rising 0.9 against the dollar to 1,088.10 as of 11:22 a.m. in Seoul. The currency strengthened 1.2 percent to 11.74 per yen.
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