BOK Chief Says Inflation Worse Than Slowed Economic Growth

Bank of Korea Governor Rhee Chang-yong on Monday said inflation is a bigger concern for the bank than economic slowdown.

"Rising consumer prices and slowed growth are both worrisome, but so far inflation poses a bigger concern," Rhee told reporters in his first press conference since his inauguration last week. 

"Monetary normalization will continue, but the pace of interest rate hikes will have to be decided when we see the data," he added. 

The governor cited the U.S. Federal Reserve's rate decision early next month as the key variable in the BOK's own next move. 

Rhee sided with hawks in favoring a rate hike citing inflation fears over the short term, but added, "I want to be dovish from a long-term perspective. As society ages, I want to make sure the growth rate does not decline sharply and maintain it at a high level so that employment and quality of life improve."

"The Korean economy is a large ship, and if it remains tilted by one degree, it will head in a different direction no matter how hard you try to get somewhere," he added. "The BOK must play the role of controlling the ship so it sails in the right direction."