Shin Hyunsong: "Maintaining Tightening Stance on Base Rate... Timing and Response Will Depend on Situation"

National Assembly Planning and Finance Committee Work Report
Governor Shin: "Maintaining a Higher Base Rate Is the Most Reasonable Way to Curb Core Inflation"

Shin Hyun-song, Governor of the Bank of Korea, stated on the 29th, "I believe that it is most reasonable to maintain the current tightening stance on the base rate in order to control core inflation."

Governor Shin made these remarks during a work report to the Planning and Finance Committee at the National Assembly, responding to a question from Yoon Hu-duk, a member of the Democratic Party of Korea, about whether there were any plans to raise the base rate within the year.

However, regarding the level and specific timing of a rate hike, he refrained from giving details, saying, "We will watch the data we receive going forward and the overall economic situation."

When Assemblyman Yoon asked whether the inflation rate could go below 3.0% by the end of the year, Governor Shin replied, "Due to a short-term shock, the inflation rate rose to 3.2% in June," but also emphasized, "We are paying closer attention to core inflation, which climbed to 2.5% in May."

The governor's point was that with energy prices rising due to the war in the Middle East, there is a need to closely monitor a situation where core inflation, which excludes energy prices, is also increasing, rather than only tracking headline consumer prices including energy.

Governor Shin has repeatedly stressed the importance of monitoring the secondary effects that international oil price hikes, caused by the Middle East situation, can have on other sectors.

He also emphasized, "While there is inflation through cost channels, there continues to be demand-side pressure resulting from the robust growth associated with an economic boom."

Meanwhile, ahead of the work report, when Im I-ja, a member of the People Power Party, called for an apology regarding the issue of his children's nationality raised during the confirmation hearing, Governor Shin said, "I apologize to the public for the difficulties in the confirmation process," and added, "The issue regarding my children's nationality has now been completely resolved."

Hyun Song Shin, Governor of the Bank of Korea, is attending the full meeting of the Finance and Economy Planning Committee held at the National Assembly on July 29, 2026. Photo by Hyunmin Kim

This content was produced with the assistance of AI translation services.