Bank of Korea on the lagged effect of monetary policy changes.
- said the lagged effects of its aggressive streak of monetary tightening would have a bigger negative impact on economic growth this year than in 2022
- estimates that its 300 basis points of rate increases in the current tightening cycle would drag down the country's economic growth rate by 1.4 percentage points in 2023, compared with 0.9 percentage points last year
- expected to lower consumer inflation by 1.3 percentage points this year, versus 0.4 percentage points a year before
Reuters reporting on the BoK's quarterly monetary policy report submitted to parliament on Thursday.
Lags in monetary policy impact are not confined to South Korea of course - read this info as generally applicable globally.
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- On foreign exchange, the central bank's monetary tightening relieved, by some degree, the weakening pressure on the Korean won that stemmed from the U.S. Federal Reserve's interest rate hikes, the BOK said
- external factors such as U.S. monetary policy have had a bigger impact on foreign exchange than internal factors, it added.
