![\"Bank](\"https:\/\/www.europesays.com\/korea\/wp-content\/uploads\/2026\/08\/news-p.v1.20260811.146f2fe9a830410c86d8d8df83a529c6_P1.jpg\"\/ "\\"BOK")
Bank of Korea Senior Deputy Governor Yoo Sang-dae speaks at a press briefing held at the Bank of Korea in Jung-gu, Seoul, on the morning of the 11th. Photo courtesy of the Bank of Korea<\/p>\nBank of Korea Senior Deputy Governor Yoo Sang-dae speaks at a press briefing held at the Bank of Korea in Jung-gu, Seoul, on the morning of the 11th. Photo courtesy of the Bank of Korea<\/p>\n
Ryoo Sang-dai, deputy governor of the Bank of Korea (BOK), strongly signaled the likelihood of further interest rate increases just 10 days before his term ends on the 20th. While he will not attend the Monetary Policy Board meeting on the 27th, he said additional hikes were “highly likely absent any special shock or factor.” As remarks from a deputy governor who has shared monetary policy matters with the governor and the rest of the executive team, his comments are expected to be read as a gauge of the current leadership’s policy thinking.<\/p>\n
At a press briefing on the 11th, the deputy governor said, “Because we raised the rate in July, the pace and scale may be a complicated matter for the time being, but absent any special shock or factor, an additional hike is highly likely.” He added, “There will be another increase, and its timing and pace will be decided by looking at the data.”<\/p>\n
He drew a line, however, on whether a specific hike would come at the August board meeting, saying that would depend on future data. With second-quarter gross domestic product (GDP) and July prices showing solid trends, he said the growth and inflation paths would need to be confirmed through the economic outlook from the BOK’s research department, due this week, along with daily customs-cleared exports and credit card spending.<\/p>\n
A quantitative analysis released the same day also offered clues for future judgment. It showed that when improved terms of trade from higher export prices boost the economy, consumption expands by up to about 0.5 percentage points four to five quarters later, while investment expands by about 0.8 percentage points immediately after the shock. The deputy governor said this did not mean future consumption would be used as grounds for a hike, but explained that the analysis illustrates the path by which strong exports feed through to domestic demand and prices. How much of this transmission path is reflected in the August economic outlook is also expected to be a key point to watch in judging further hikes.<\/p>\n
This tightening cycle also differs in character from the past. Among the phases the BOK has classified since 2000, the first (October 2005 to August 2008), a period of real economic expansion, raised the base rate by 2.00 percentage points over 34 months. The second (July 2010 to June 2011) raised it by 1.25 percentage points over 11 months during the recovery following the global financial crisis. The third (November 2017 to November 2018) came during an IT recovery but managed only a 0.50 percentage point increase over 12 months. The fourth (August 2021 to January 2023), by contrast, was the steepest cycle, raising the rate by 3.00 percentage points over 17 months against a backdrop of post-pandemic demand recovery.<\/p>\n
This time, strong semiconductor and AI supply chains are driving growth. Nominal GDP in the first quarter of this year rose 17.1% from a year earlier, and the current account surplus from January to June reached $191 billion, 1.6 times last year’s full-year figure. A defining feature of this cycle is the possibility that improved terms of trade from higher export prices will lift incomes before feeding through to consumption, investment and prices.<\/p>\n
On inflation, he was more wary of persistence than of the size of the increase. The deputy governor explained that this bout of inflation is not the kind of supply-shock surge seen during the war between Russia and Ukraine, but that demand pressure from the economic recovery could persist for a considerable time through core inflation. “The scale will not be large, but there is persistence, and that persistence will bring monetary policy considerations,” he said. He avoided a clear answer on whether the rate would exceed 3.50%, the terminal base rate of the fourth tightening cycle. Given that what matters is whether prices show a downward trend within a stable range, rather than reaching the 2% target precisely, his comments were read as declining to pin down the terminal rate level or the timing for ending hikes.<\/p>\n
The recent decline in the won-dollar exchange rate to the low 1,400 range could give some room in conducting monetary policy, he said, but is not a decisive variable. The deputy governor stressed that greater weight should be placed on whether core inflation stays elevated, whether growth continues and whether financial stability risks grow. He also assessed the exchange rate as a factor putting upward pressure on prices, calling the 1,400-won range “a very high level.”<\/p>\n
Responding to a suggestion that rate hikes may be too fast given that growth in industries other than semiconductors and AI is weak, he countered that monetary policy should look at inflation, growth and financial stability across the economy as a whole, rather than the slump in a particular industry. His position is that gaps in growth between industries should be addressed with separate policy, not monetary policy.<\/p>\n","protected":false},"excerpt":{"rendered":"Bank of Korea Senior Deputy Governor Yoo Sang-dae speaks at a press briefing held at the Bank of…\n","protected":false},"author":2,"featured_media":115773,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[456],"tags":[845,846,29147,858,3657,2137,47887,850],"class_list":["post-115772","post","type-post","status-publish","format-standard","has-post-thumbnail","category-bank-of-korea","tag-bank-of-korea","tag-bok","tag-core-inflation","tag-interest-rate-hike","tag-monetary-policy","tag-ryoo-sang-dai","tag-terms-of-trade","tag-won-dollar-exchange-rate"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/115772","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/comments?post=115772"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/115772\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/115773"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=115772"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=115772"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=115772"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}