The Bank of Korea's decision on interest rates depends on a comprehensive assessment of inflation, economic conditions and financial stability, deputy governor Jang Jeong-su said in a press conference on Tuesday discussing the central bank's financial stability report.
The central bank does not estimate a specific threshold for interest rate increases that will change the trend of the financial vulnerability index, which is used to measure financial stability, Jang said.
Future financial stability will hinge on the degree of financial balance accumulation, financial market movements, global monetary policy changes, geopolitical risks and improvements in social income, according to Lim Kang-gyu, director general of the central bank's financial stability department.
The rate hikes in July and August should help mitigate risks from accumulating financial imbalances, with the burden assessed as generally manageable, Lim said.