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18:14, 04-Jun-2018
South Korea’s top central banker warns against taper tantrum after US rate hike
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South Korea's top central banker on Monday warned against a taper tantrum amid rising expectations that the US Federal Reserve could raise its benchmark interest rate further later this month.
Bank of Korea (BOK) Governor Lee Ju-yeol said in an opening remark of the international conference held in Seoul that the taper tantrum seen in 2013 can happen at any time.
The taper tantrum refers to a drastic increase in bond yields after the Fed's tapering to gradually reduce the amount of money that it had fed into the global financial market.
Lee's comments came as expectations ran high for the Fed to raise its target rate by a quarter percentage point to a range of 1.75-2.00 percent at the upcoming rate-setting meeting scheduled for June 12-13.
The US benchmark rate surpassed the BOK's target rate of 1.50 percent. The BOK lifted its target rate to the current level in November last year, and the bank has kept it unchanged.
Lee said the 2013 taper tantrum caused instability in the international financial market and a drastic capital outflow from emerging markets, warning that such drastic capital outflow and instability in the global market can recur any time.
Source(s): Xinhua News Agency