Bank of Korea Governor Shin warned authorities cannot fall behind the curve on
inflation, signaling growing urgency to act. He said the ongoing Middle East
conflict, including the Iran crisis, is lifting inflationary pressure by pushing
up energy prices and disrupting supply chains. Shin added that the combined
dynamics of growth, inflation and financial stability point toward a clear
policy direction and policymakers must avoid acting too late if price stability
is threatened. His comments are likely to reinforce market expectations that the
BOK could resume tightening as soon as next month. Even if cost-relief measures
ease some pressure, South Korea’s inflation may remain above target for an
extended period.
