| Deputy Prime Minister Koo Yun-cheol (left) and Bank of Korea Gov. Rhee Chang-yong shake hands during their meeting at the Bank of Korea in Seoul on Thursday. (BOK) |
Bank of Korea Governor Rhee Chang-yong said Thursday that the recent Korea-US tariff agreement has eased pressure on the central bank’s policy outlook ahead of its next rate-setting meeting later this month.
“If the tariff talks had gone poorly, we would have faced a difficult situation going into the next monetary policy meeting,” Rhee told reporters after a closed-door meeting with Deputy Prime Minister and Finance Minister Koo Yun-cheol. “The outcome is meaningful for Korea during a challenging time.”
The agreement, struck last week with Koo as one of the lead negotiators, reduced a threatened 25 percent US tariff on Korean exports to a 15 percent blanket rate. In return, Seoul committed to $350 billion in US investments and $100 billion in energy purchases.
The BOK has delivered two rate cuts this year in February and May, each by 25 basis points, as it shifts its focus toward supporting growth amid weakening domestic demand and external uncertainty. The current benchmark rate stands at 2.5 percent, down from 3.0 percent at the beginning of the year.
Some analysts say the bilateral trade deal makes a rate hold more likely at the Aug. 28 meeting, as it helped Korea avoid a deeper slowdown. Stronger chip exports, government stimulus cash handouts and a stock market rebound are also reducing pressure for an immediate rate cut.
Rhee’s remarks came during Koo’s first official visit to the BOK since taking office on July 21, signaling efforts to strengthen policy coordination.
Koo called for a “one-team” approach to guide the economy through structural reform and recovery.
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