Early rate hike ahead of Fed's move minimized economic costs: BOK chief

Bank of Korea Gov. Shin Hyun-song said Monday that raising interest rates in August, ahead of the U.S. Federal Reserve’s September hike, gave Korea more time to respond and reduced the economic costs of monetary tightening. The BOK raised its policy rate by 0.25 percentage point in both July and August to 3 percent. Shin left the door open to further increases as inflation is expected to remain above the BOK’s 2 percent target. He also said the government’s proposed budget could raise economic growth by 0.5 percentage point while adding 0.06 percentage point to inflation.

The Federal Reserve raised its benchmark rate by 0.25 percentage point in September to a range of 3.75 percent to 4 percent, its first increase since July 2023.

Shin said expectations of BOK rate increases were reflected in bond yields and other market prices before the hikes took effect.

The governor said the timing and pace of additional rate increases would depend on inflation, economic growth and financial stability conditions.

Shin acknowledged that higher interest rates place a heavier burden on vulnerable households, particularly lower-income borrowers.

Shin said the BOK was using economic models to assess whether the government’s expansionary fiscal policy and monetary tightening would undermine each other.

Published Oct 12, 2026 4:09 pm KST

Updated Oct 12, 2026 4:20 pm KST

Bank of Korea Gov. Shin Hyun-song speaks during a parliamentary audit at the bank's headquarters in Seoul, Monday. Joint Press Corps

Bank of Korea (BOK) Gov. Shin Hyun-song said Monday that the central bank's August rate hike ahead of the U.S. Federal Reserve's September move gave Korea more time to respond and helped minimize the economic costs of monetary tightening.

"We signaled a shift toward higher interest rates earlier than many other major economies. By raising rates in August, ahead of the Fed's September hike, we bought ourselves time," Shin said during a parliamentary audit of the central bank.

"Taking action early carries far lower economic costs than having to raise rates defensively in response to market pressure," he added.

Shin said the preemptive move also helped guide market expectations, noting that the prospect of BOK's rate increases was reflected in bond yields and other market prices before the hikes actually took effect.

The BOK raised its policy rate by 0.25 percentage point in both July and August, bringing it to 3 percent. The Fed raised its benchmark rate by 0.25 percentage point in September, its first increase since July 2023, to a range of 3.75 percent to 4 percent.

During the audit, Shin left the door open to further rate hikes, warning that inflation is expected to remain above the BOK's 2 percent target for an extended period as cost pressures continue to pass through to consumer prices.

"One point we particularly take into account is that inflation hurts low income and vulnerable groups the most," Shin said in response to a question from Rep. Yoon Hu-duk of the ruling Democratic Party of Korea about possible rate hikes at the BOK's October and November policy meetings.

"The timing and pace of any further rate increases will depend on inflation and economic growth trends, as well as financial stability conditions," he said.

The governor also acknowledged that monetary tightening places a heavier burden on vulnerable households, as borrowers from lower income groups are hit harder by rate hikes.

The audit also saw opposition lawmakers question whether the government's expansionary fiscal policy would undermine the BOK's efforts to curb inflation through monetary tightening.

"Expansionary fiscal policy puts pressure on prices and the money supply in the short term," said Rep. Lee Jong-wook of the main opposition People Power Party.

Higher interest rates are intended to cool the economy by making borrowing more expensive and discouraging spending and investment. An expansionary fiscal policy, however, can have the opposite effect by injecting money into the economy and supporting demand.

In response, Shin said the BOK was using economic models to assess whether the two policies would work against each other.

He estimated that the government's budget proposal for next year would boost Korea's economic growth by 0.5 percentage point while adding 0.06 percentage point to inflation.

"If potential growth rises over the medium to long term, the two policies may not necessarily work against each other," Shin said.

韩国央行行长申铉松周一表示，在美联储9月加息之前于8月提高利率，使韩国有更多时间应对，并降低了货币紧缩带来的经济成本。韩国央行在7月和8月均将政策利率上调0.25个百分点至3%。申铉松表示，由于预计通胀率将继续高于韩国央行2%的目标，因此不排除进一步加息的可能性。他还表示，政府提出的预算案可能使经济增长率提高0.5个百分点，但同时也会使通胀率上升0.06个百分点。

美联储在9月份将基准利率上调0.25个百分点，至3.75%至4%的区间，这是自2023年7月以来的首次加息。

申表示，在韩国央行加息生效前，债券收益率和其他市场价格已经反映了市场对加息的预期。

州长表示，进一步加息的时机和速度将取决于通货膨胀、经济增长和金融稳定状况。

申承认，较高的利率会给弱势家庭，特别是低收入借款人，带来更沉重的负担。

申宗宪表示，韩国央行正在利用经济模型来评估政府的扩张性财政政策和货币紧缩政策是否会相互抵消。

发布于2026年10月12日下午4:09（韩国标准时间）

更新于2026年10月12日下午4:20（韩国标准时间）

韩国央行行长申铉松周一在首尔央行总部出席国会审计听证会并发表讲话。（联合记者团摄）

韩国央行行长申贤松周一表示，韩国央行在美联储9月加息之前于8月加息，这给了韩国更多时间做出反应，并有助于最大限度地减少货币紧缩带来的经济成本。

“我们比许多其他主要经济体更早地发出了加息信号。通过在美联储9月份加息之前于8月份提高利率，我们为自己赢得了时间，”申东赫在国会就央行进行审计时表示。

他补充说：“及早采取行动的经济成本远低于迫于市场压力而被动提高利率的成本。”

申表示，这一先发制人的举措也有助于引导市场预期，他指出，在韩国央行实际加息之前，债券收益率和其他市场价格已经反映了韩国央行加息的前景。

韩国央行在7月和8月均将政策利率上调0.25个百分点，至3%。美联储在9月将基准利率上调0.25个百分点，这是自2023年7月以来的首次加息，利率区间为3.75%至4%。

在审计过程中，申宗宪并未排除进一步加息的可能性，并警告称，由于成本压力持续传导至消费者价格，预计通胀率将在较长时间内保持在韩国央行 2% 的目标之上。

申宗宪在回答韩国执政党共同民主党议员尹厚德关于韩国央行10月和11月政策会议上可能加息的问题时表示：“我们特别考虑到的一点是，通货膨胀对低收入群体和弱势群体的伤害最大。”

他表示：“未来加息的时机和速度将取决于通货膨胀和经济增长趋势，以及金融稳定状况。”

州长也承认，货币紧缩会给弱势家庭带来更沉重的负担，因为低收入群体的借款人受利率上升的打击更大。

审计过程中，反对派议员也质疑政府的扩张性财政政策是否会削弱韩国央行通过收紧货币政策来抑制通货膨胀的努力。

“扩张性财政政策会在短期内给物价和货币供应带来压力，”主要反对党国民力量党议员李钟旭表示。

提高利率旨在通过增加借贷成本来抑制消费和投资，从而为经济降温。然而，扩张性财政政策则可能产生相反的效果，因为它会向经济注入资金，从而提振需求。

对此，申东赫表示，韩国央行正在利用经济模型评估这两项政策是否会相互抵消。

他估计，政府明年的预算提案将使韩国经济增长率提高0.5个百分点，同时使通货膨胀率上升0.06个百分点。

申表示：“如果中长期潜在增长上升，这两项政策未必会相互抵消。”