S.Korea PM says weak won helpful for exports, expects policy tightening to lag U.S.
SEOUL — The weakness in the won currency should help South Korea’s economy, Prime Minister Han Duck-soo said on Sunday, adding that he expected monetary policy to be tightened more slowly and by less than in the United States.
“The won’s weakness should be helpful for the economy in aspects of exports and the current account, although it would increase inflationary pressure to some degree,” Han said during a televised interview.
Han said the exchange rate was determined by the market and that international accords meant that intervention could only be undertaken to soothe short term volatility. The prime minister said such intervention should be minimal and only occur when needed.
In an interview with Reuters on the sidelines of the Jackson Hole conference of central bankers in the United States, Bank of Korea Governor Rhee Chang-yong said South Korean rates should rise until inflation is in decline, and that the central bank likely could not halt its tightening before the U.S. Federal Reserve. (Reporting by Jihoon Lee; Editing by Simon Cameron-Moore)