NATION'S KEY RATE TO BE RAISED

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The Bank of Korea has made it official -- the nation's key rate will be raised within this year. Moreover, the rate could be raised several times.

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Bank of Korea Governor Lee Ju-yeol mentioned the possibility of a key rate increase at a Monetary Policy Board meeting in May and in his speech marking the central bank's founding early this month. On Thursday, the BOK chief gave a more detailed answer on exactly when the key rate will be raised.

[Soundbite] Lee Ju-yeol(Governor, Bank of Korea) : "I said clearly before that monetary policies would be normalized in an orderly manner within this year."

For the first time Lee specified the time of the pending increase: this year. He delivered a powerful message to the market that the key rate will be raised for sure in 2021. The central banker emphasized, the current rate was adjusted unprecedentedly due to the pandemic and normalizing it in line with the economic recovery is a given. He also mentioned financial imbalance. Lee stressed that the need to adjust monetary policies grows by the day due to the flood of liquidity in the asset market and the snowballing household debt. The BOK chief hinted at the possibility of raising the key rate not once, but multiple times.

[Soundbite] Lee Ju-yeol(Governor, Bank of Korea) : "Even if the key rate is raised once or twice, the monetary policy will remain accommodative."

Market analysts predict the key rate could be raised later this year and early 2022.