Central banks carry out differing monetary policies
Central banks are all looking to find their own ways to stay afloat in the face of slow global economy.
Shin Se-min looks into the mixed signals when it comes monetary policies.
A Bank of Korea report shows that central banks around the world are heading in different directions in terms of monetary policy,… amid the varying economic circumstances of different countries.
The report released Tuesday said that of 24 nations either a member of the G20 or the OECD,... only three central banks raised their key interest rates in the last quarter of 2016.
In December, the U.S. Federal Reserve raised its key rate by a quarter of a percentage point to a range of half-a-percent to three-fourths of a percent.
The central banks of Turkey and Mexico have also boosted their key rates by half-a-percentage point and one-percentage point, respectively, as they try to keep a lid on inflation.
Six other central banks, on the other hand, adopted easier monetary policies.
Those include the ECB, and the banks of India, Indonesia, Brazil and New Zealand, which cut their key rates... in the face of weak economic growth.
All the rest, including Japan and China, kept rates steady.
The Bank of Japan is said to be gauging the impact of the easy money policy it introduced last September, while the Bank of England is also likely to take a wait-and-see approach due to uncertainties over Brexit.
The Bank of Korea, too, has left its key rate steady at an all-time-low of one-and-a-quarter percent since last June, hoping to support a recovery in economic growth.
The BOK has promised to pay close attention to maintaining its financial stability, while watching the effect of U.S. rate hikes on the local economy... and growing protectionism movements around the world.