Inflation targeting deemed a beneficial tactic to counteract political pressure, according to BOK chief
In a conversation held at the IMF headquarters in Washington on September 18, Bank of Korea Governor Rhee Chang-yong met with IMF Managing Director Kristalina Georgieva. The exact nature or topics discussed during the conversation were not specified.
The meeting, which took place in a modal window, came as the debt-to-GDP ratio hit an all-time high of 47.2% in Q1, according to the Bank of Korea. Despite this, no new statement regarding the need for rate cuts to prop up growth was made during the conversation between Rhee Chang-yong and Georgieva.
Interestingly, a board member of the Bank of Korea had previously stated that rate cuts are needed to support growth. However, it remains unclear whether this view was discussed during the meeting.
The impact of the conversation between Rhee Chang-yong and Georgieva on global financial markets was not mentioned in the article. The Kospi shares, on the other hand, maintained their record high despite the conversation. It's worth noting that the Kospi shares renewed a record high after the Fed rate cut.
Economic chiefs continue to see limited domestic impact from the latest U.S. rate cut. This sentiment was echoed in the article, with no potential decisions or actions that may have been agreed upon during the conversation between Rhee Chang-yong and Georgieva being specified.
Looking forward, the next rate decision meeting of the International Monetary Fund (IMF), during which Bank of Korea Governor Rhee Chang-yong will participate, is expected to coincide with the upcoming Federal Reserve policy meeting next week. A rate cut of 0.25 percentage points is widely anticipated at the Federal Reserve meeting.
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