BOK to focus on taming inflation, chief says

South Korea's central bank will focus on taming inflation going forward as the current level is higher than its target, its chief said Monday.

In a parliamentary session, Bank of Korea (BOK) Gov. Rhee Chang-yong said the current price levels are higher than the central bank's target, and it will implement its monetary policy with a focus on inflation.

The central bank's midterm inflation target is 2 percent.

South Korea's consumer prices grew at the slowest pace in more than a year in April in the latest signal that inflation has receded.

Consumer prices, a key gauge of inflation, rose 3.7 percent last month from a year earlier, compared with a 4.2 percent on-year rise in March, marking the first time in 14 months that on-year inflation growth fell below 4 percent.

"April inflation fell to 3.7 percent, and the downward trend will continue in the future," Rhee said adding that South Korea is doing well in terms of stable price levels compared to other advanced countries.

The BOK held its key rate steady at 3.5 percent last month after a rate freeze in February as inflation appears to be easing and concerns are rising over an economic slowdown.

The central bank is scheduled to hold its monetary policy meeting later this week and may face the daunting task of whether to freeze the rate again or raise it.

It is expected to stand pat again amid easing inflation and a slowdown in economic growth.

The BOK chief also said the currency rates are another concerns due to widening interest rate gaps with the United States, but the won-dollar rate is showing signs of stabilization.

Source: Yonhap News Agency