Business · Economy · 1 hr ago
Bank of Korea governor says early rate hikes helped steady markets
Bank of Korea Governor Shin Hyun-song said the central bank’s rate increases in July and August helped give markets time to adjust.
He made the comments during a parliamentary audit in Seoul on October 12.
The Bank of Korea began raising rates earlier than some other major economies, he said.
Much of the expected effect of the increases had already appeared in market prices by May and June.
Shin said South Korean government bond yields had been stable over the previous two to three weeks.
He argued that acting early could help steady markets and reduce the cost of sharper rate increases later.
The bank plans to keep its current approach to communicating future rate policy, including its dot plot, for the time being.
Bank of Korea Governor Shin Hyun-song said early interest rate increases helped steady markets and reduce the eventual economic cost.
He said the central bank shifted toward rate increases somewhat earlier than other major economies.
Shin said much of the expected impact of the rate increases had already been reflected in market prices in May and June.
He said South Korean government bond yields had remained fairly stable in recent weeks.
Shin made the remarks during a parliamentary audit in Seoul on October 12.
- Who
- Bank of Korea Governor Shin Hyun-song.
- What
- He said early rate increases helped steady markets, provide guidance and limit eventual costs.
- When
- October 12, 2026.
- Where
- At the Bank of Korea in central Seoul, during a parliamentary audit.
- Why
- Shin said moving early helped guide markets and avoid larger changes or more costly defensive rate increases later.
This story does not have two clearly opposing sides.
I think we bought time.
By moving in advance, we gave guidance to the market and also had the effect of preventing bigger changes later.
I think the ultimate cost can be reduced by moving proactively and helping stabilize the market.
Shin said much of the impact of the rate increases was reflected in market prices.
The Bank of Korea raised its benchmark interest rate in consecutive months.
South Korean government bond yields remained fairly stable, Shin said.
Shin discussed the rate increases and market conditions during a parliamentary audit in Seoul.
- Governor
- Shin Hyun-song
- Rate increases
- Consecutive benchmark rate hikes in July and August
- Market pricing
- Much of the impact was reflected in prices in May and June
- Bond yields
- South Korean government bond yields were fairly stable in the previous two to three weeks
- Statement date
- October 12, 2026
Sources
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