이 누리집은 대한민국 공식 전자정부 누리집입니다.
Biz News Korea(Eng)
- Collected
- 2019.09.19
- Distributed
- 2019.09.20
- Source
- Go Direct
A member of the Bank of Korea (BOK)’s monetary policy committee raised alarm about the protracted subduedness in consumer prices to argue for more aggressive monetary policy to aid prices and demand.
Over-depression in “expectational inflation”, the secondary force that drives demand and cost push, can “destabilize” rate actions and lessen policy maneuvering room to aid the economy in trouble, Shin In-seok told reporters on Wednesday.
Shin, dubbed a dovish voice among the seven-member rate-setting board, warned neglect in the warning signs in expectational inflation that reflects sentiment for future demand could push the economy down in the same doomed path of Japan in its lost decades.
“The persistent low prices over the past six years might have weakened inflation expectations of the economic players in the country,” said Shin, warning of ominous movements towards deflation.
Last month, the nation’s consumer price index fell 0.038 percent from a year ago to 104.81, the first sub-zero experience since the data was kept from 1965. Consumer prices from the January to August period this year added a mere 0.5 percent, the slowest since 1965.
He argued Korea still has room to push down the rate at least once as the policy rate is at 1.50 percent, above the historic low of 1.25 percent.
At least one cut has already been factored in the market. The three-year government bond that fell to as low as 1.093 percent last month has rebounded to 1.322 percent.
By Kim Yeon-joo and Choi Mira
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]