Fed might speed up normalization of financial policy: BOK
Updated: 2021-09-23 17:16:16 KST
South Korea's central bank will keep an eye on the country's financial market as there's increasing uncertainty related to the Federal Reserve's tapering plans, which could increase market volatility.
According to the Bank of Korea's Senior Deputy Governor Lee Seung-heon on Thursday, the Fed's decision to hold interest rates is in line with market expectations, but there is a chance that the Fed might speed up the normalization of its financial policy.
This comes after the Fed on Wednesday sent a strong sign that it's almost ready to taper its bond-buying program, and could announce this as early as November.
In its post-meeting statement, the Fed's policymaking Federal Open Market Committee explained that a moderation in the pace of asset purchases may soon be warranted.
Fed Chairman Jerome Powell also said the committee is ready to move, explaining during his post-meeting press conference that committee officials generally viewed that a gradual tapering process that concludes around mid-2022 is likely to be appropriate, given that the U.S. economy's recovery remains on track.
The Fed restarted its large-scale asset purchases in March 2020, in response to the economic impact of the pandemic.
"Today, the Federal Open Market Committee kept interest rates near zero and maintained our current pace of asset purchases."
In the meantime, the officials added that they expect to raise rates by late 2022, sooner than they had expected in June.
Jang Tae-hyun, Arirang News.