Inflation and the key interests rate in Korea

By Andy Jeong

   Most people (especially, wives of the families) have recently felt that everything such as food and oil is getting more expensive than the last year. What are the reasons of the circumstance?

   One of the reason is because of the current state of Japan. The radiation brings the investors not invest money to Korea as they did before. Also, because of rising oil price sharply which is needed to produce many things brings the inflation to Korea. The major countries of producing oil are suffering from the revolution for the human rights and it affects the oil price to increase.

   Accoding to BOK(the Bank of Korea), current consumer prices have been going up quickly by 4.5 percent. The BOK governor Kim Choong-soo mentioned, "It's true that prices rose 4.7 percent in March, but the monetary policy committee sets rates based on expectations for the future, not just what happened in the previous month." The key interests rate is decided to be kept at 3 percent by BOK last Tuesday although there is inflation in Korea. People and experts exactly do not know if the decision of BOK will affect inflation and consumer prices. 

   According to The Korea Times, a British expert said investment capital is going to come back to Asia in two months last Tuesday. Osama Abbasi, CEO of Credit Suisse Asia Pacific said in and interview with The Korea Times, "We have a very big investment conference every year for Asia in Hong Kong, where we have about 2,000 investment clients and about 300 corporations across all sectors and all countries in Asia and we carried out a poll on 'At what point do you see fund flow going back into emerging Aisa from the developed (countries) and 75 percent of the room felt that it would happen in two months."

   In conclusion, there are some positive and negative opinions about the future of Korean economy. Although many people are struggling with high consumer prices, there are possibilities to get better. The Korean goverment should concern about inflation more and should do their best to solve the problems of the current circumstance of the Korean economy.


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