SEOUL, March 22 (Xinhua) -- South Korea's top central banker said Thursday that the U.S. Federal Reserve's interest rate hike was in line with market expectations, vowing to cautiously watch future market moves.
Bank of Korea (BOK) Governor Lee Ju-yeol told reporters that he will very cautiously watch market moves as South Korea's benchmark rate was lower than the U.S. counterpart with the Fed's rate hike overnight.
The Fed, led by its new head, Jerome Powell, raised its benchmark rate by a quarter percentage point to a range of 1.50 percent to 1.75 percent. It marked the sixth rate increase since the U.S. central bank began lifting the near-zero rate in December 2015.
With the Fed's rate hike, the BOK's target of 1.5 percent was lower than the U.S. counterpart, fueling worry about an abrupt foreign capital exodus from the South Korean financial market.
Lee said the Fed's decision can be seen as slightly hawkish, but he noted that it was in line with market expectations, predicting little impact on the South Korean financial market.
He vowed to closely monitor market moves, saying that if the financial market is destabilized, the BOK will seek to stabilize it through various policy tools.
The BOK lifted its policy rate by 25 basis points in November last year to the current 1.5 percent from an all-time low of 1.25 percent, tightening its monetary position for the first time in nearly six and a half years.
Asked about the possibility for the BOK's rate hike in May, Lee said there are too many factors to consider, adding that the Fed's rate hike and the BOK's economic outlook revision next month will be taken into account.
The benchmark Kospi index rose 0.9 percent to trade at 2,507.28 as of 10:15 a.m. local time (0115 GMT) on views that market uncertainty disappeared with the Fed's rate hike.
