A senior official at the Bank of Korea said that inflation risks have increased and it's time to consider raising interest rates.

Ryoo Sangdai, senior deputy governor of the Bank of Korea, said it's time to consider raising interest rates, as economic growth seems unlikely to fall significantly short of the central bank's earlier forecasts, while inflation may exceed previous expectations. Sangdai, who is also a member of the Bank of Korea's Monetary Policy Committee, cited the stronger-than-expected economic resilience following the outbreak of the Middle East wars and the rising inflationary pressures. The Bank of Korea has kept its benchmark policy rate unchanged since July of last year. In February, the Bank of Korea projected 2% economic growth and 2.2% inflation for the year. While policymakers initially expected the unrest in Iran to drag down economic growth and push up prices, recent data shows that the growth outlook has not deteriorated as feared due to strong semiconductor shipments, while inflationary risks have increased. Regarding the won exchange rate, Sangdai stated that from an economic fundamentals perspective, the won remains weaker than in the past, although the market does not seem to see the current level as a major problem. The won recently hit its lowest level against the US dollar since the global financial crisis. Speaking about concerns about the economy's reliance on semiconductors, Sangdai said the key risk lies in whether the cycle shifts or whether the spillover effects are lower than expected, rather than the industry's increasing share itself. (Jinshi)