Bank of Korea chief says era of ultra-low interest rates unlikely to return

Bank of Korea Governor Shin Hyun-song said Friday that a return to the era of ultra-low interest rates seen in the past is unlikely.

Shin made the remarks Friday afternoon at a comprehensive national audit by the National Assembly's Finance and Economy Planning Committee, where Democratic Party of Korea lawmaker Kim Tae-nyeon asked whether he agreed with that assessment. "I agree," Shin said.

He also agreed with the view that policymakers should not simply wait for interest rates to fall again, but instead build an economic policy framework premised on a prolonged period of high interest rates. "I agree," he said.

The Bank of Korea raised its benchmark interest rate to 3 percent in consecutive moves in July and August before holding it steady in October. Markets expect the central bank to raise rates again in November.

"Going forward, growth rates and interest rates will move together, so rather than being trapped by the old concept of secular stagnation, we will pursue policies that prepare for a future of high growth and high interest rates," Shin said.