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“Monetary policy needs to stay accommodative until a stable recovery in our economy is seen, as there are high uncertainties to the growth path, while inflation is also expected to fall below the target level for a while,” said the Bank of Korea (BOK) Governor Lee Ju-yeol said in a New Year’s message on Thursday.

The South Korean central banker also cited global resurgences in COVID-19 cases, the discovery of virus variants and the possibilities of a reignition in global trade disputes as risks to the export-reliant economy, in addition to demographic and labor challenges, per Saltwire.com.

Market reaction

USD/KRW remains on the back foot around 1,084, down 0.39% intraday, following the news. In doing so, the pair fades recent corrective pullback from a three-week-low flashed earlier in Asia.