Seoul fiscal, monetary, financial chiefs vow "joint actions" ahead of CPI, rate meeting

[Photo by Kim Ho-young]

South Korean fiscal, monetary, and financial authorities on Monday held another emergency meeting in less than a month, finding the economy in lengthy perils as Korean capital markets open the second half on dismal note with runaway inflation dampening the local and global economy.

Authorities reconfirmed the need of “joint actions” by keeping close watch on the market and economic developments with urgency as “complex economic crisis conditions are likely to last for a considerable period”, said the Ministry of Finance and Economy Monday in a press release.

The morning meeting was attended by deputy prime minister for economy Choo Kyung-ho, Bank of Korea governor Rhee Chang-yong, Financial Services Commission vice chair Kim So-young, Financial Supervisory Service governor Lee Bok-hyun, and senior presidential secretary for economic affairs Choi Sang-mok.

(From left) Kim So-young, vice chair of the Financial Services Commission; Choi Sang-mok, senior presidential secretary for economic affairs; Finance Minister Choo Kyung-ho: Bank of Korea Gov. Rhee Chang-yong; and Lee Bok-hyun, chief of the Financial Supervisory Service. [Photo provided by Bank of Korea]

Policymakers will meet “frequently” to coordinate joint actions. They last met on June 16. Their meeting comes ahead of the monetary policy meeting next week, when the Bank of Korea is expected to deepen the tightening scope with a hike of 50 basis point to place the base rate at 2.25 percent, the highest since August 2014, to match the galloping pace of its U.S. counterpart and contain inflation that has been forewarned to hover above 6 percent during summer.

Korea publishes the consumer price index for June on Tuesday. Choo projected earlier the CPI that has jumped 5.4 percent on year in May to break 6 percent in June or in the following months.

The BOK in a study on global supply trend on Monday warned that Korean prices and economy would suffer from worsening global supply bottleneck due to its high external reliance.

It found half of industrial products weighted in the Producer Price Index (PPI) gained 5 percent on year, while another 40 percent rose by more than 10 percent.

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