South Korea's trade deal with the U.S. will "take a huge burden off" monetary policymakers at their upcoming meeting later this month, the country's central bank governor said on Thursday.
"I thought we would be in a difficult situation if things went wrong with tariffs before the policy meeting, and while there might be different opinions, I think you did a difficult job at a difficult time," Bank of Korea Governor Rhee Chang-yong said at his first meeting with Finance Minister Koo Yun-cheol, according to a media pool report of his opening remarks.
Koo visited the U.S. last week, just a week after he took office, as head of South Korea's negotiation team and clinched a trade deal with U.S. President Donald Trump that set import tariffs on South Korean goods at 15%, on par with Japan and the European Union. Trump had earlier threatened a tariff of 25%.
Rhee did not elaborate when asked by local reporters what he meant by saying the agreement had removed a "huge burden".
At the meeting at the Bank of Korea, Rhee and Koo agreed to communicate closely on policy coordination as well as to cooperate on long-term structural reforms, Koo's ministry said in a statement.
The Bank of Korea kept its benchmark interest rate unchanged at 2.50% last month, but a majority of board members signalled another rate cut in the next three months and warned of "significant" economic uncertainty from the U.S. tariffs.
Later in July, the Bank of Korea said a trade deal similar to that of Japan's would be marginally worse than the central bank's base-case growth projection, after data showed Asia's fourth-largest economy grew in the second quarter at the fastest pace in more than a year.
The central bank next meets on August 28.
