Bank of Korea Warns of Trade Risks Ahead of Policy Decision

The Bank of Korea's governor has cautioned about the risks to trade and economic growth, emphasizing the high level of uncertainty surrounding trade negotiations between the United States and major economies. This warning comes as the central bank prepares to make a monetary policy decision next week.

During a speech at the National Assembly on Tuesday, the governor highlighted the need to consider various factors when determining whether to resume the easing cycle on August 28. These factors include the rising delinquency rates among small businesses and regional developers, which are posing financial stability risks. Additionally, while measures to curb mortgage lending have slowed the pace of household debt growth, housing prices in certain areas of Seoul remain elevated.

Regarding economic growth, the governor noted that the momentum is expected to continue in the second half of the year, supported by supplementary budgets. However, he warned of the high risks associated with tariff negotiations. On the topic of prices, the governor mentioned that while adverse weather conditions could drive up food costs, stable energy prices and weak demand may keep inflation close to the central bank's 2% target.

The governor's remarks reflect the central bank's ongoing assessment of economic and inflationary trends, which will guide its policy decisions. The central bank is committed to ensuring economic stability and growth in the face of both global economic uncertainties and domestic challenges.