05 Aug '11, 2am

IMF urges S. Korea to raise interest rates

IMF urges S. Korea to raise interest rates

SEOUL: The International Monetary Fund urged South Korea Friday to raise its key interest rate and let the won appreciate further, saying the economy has moved beyond recovery into expansion. The IMF said in a regular report that growth is expected to remain robust, allowing policymakers to start tightening monetary policy. It tipped growth this year of 4.5 percent and 4.2 percent in 2012, and said Seoul should act to bolster the gains since inflation and potential global weaknesses pose a risk. "The immediate policy priority is to ensure a soft landing and safeguard financial stability -- through proactive monetary tightening, greater exchange rate flexibility and ongoing fiscal consolidation," the IMF said. Subir Lall, its mission chief for Korea, said the benchmark interest rate -- now at 3.25 percent -- should continue to be raised. It may have to go higher than the IM...

Full article: http://www.channelnewsasia.com/stories/afp_asiapacific_bu...

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