The Bank of Korea said last month's interest rate hike would help ease financial imbalances and contribute to more stable and sustainable economic growth.
In its quarterly monetary policy report released on Thursday, the Bank of Korea said that raising interest rates in the current environment-economic recovery and household debt-has an impact on economic growth andThe impact of inflation tends to be smaller and will play a bigger role in curbing debt.
"in a recovery such as the current one, economic participants tend to increase consumption and investment as the outlook improves, and can partly offset the impact of tightening on the economy," the central bank said.
"it is a well-known fact that the Bank of Korea has entered the cycle of raising interest rates," Park Jong-seok, deputy governor of the Bank of Korea, said at a press conference on Thursday. "
"We cannot say at this stage whether the central bank will raise interest rates until the level of interest rates tightens," Park added, adding that interest rates still support the economy after an increase.