The South Korean authorities are having to pull off a delicate balancing act: tackle inflation while simultaneously head off the threat of excessive financial volatility that can lead to disorderly deleveraging.
In its first rate hike in three and a half years, the central bank lifted its policy rate by 25 basis points to 2.75% and signaled that more hikes may be on the way.
The Korean authorities also placed a ban on new listings of (typically leveraged, tech-focused) ETFs and increased deposit requirements.
How this plays out over the coming weeks is worth watching: It's not an easy mix to manage, and the latter, if mismanaged, could have some cross-border spillovers.
#economy #markets #Korea #SouthKorea #inflation #volatility
In its first rate hike in three and a half years, the central bank lifted its policy rate by 25 basis points to 2.75% and signaled that more hikes may be on the way.
The Korean authorities also placed a ban on new listings of (typically leveraged, tech-focused) ETFs and increased deposit requirements.
How this plays out over the coming weeks is worth watching: It's not an easy mix to manage, and the latter, if mismanaged, could have some cross-border spillovers.
#economy #markets #Korea #SouthKorea #inflation #volatility