BoK's Lee Says Hike Not Tightening

Futures in South Korea are higher, 10-year up 22 ticks at 126.53 while in the cash space yields are mostly lower. The move comes despite comments from BoK Governor Lee that policy normalization would begin this year. Lee noted that given the extraordinary levels of monetary accommodation a rate hike should not be seen as tightening, but normalising. Lee also noted it was necessary for fiscal and monetary policy to compliment each other. As a reminder we heard yesterday that the upcoming extra budget could be KRW 30tn, if approved this would be the sixth supplementary budget of the pandemic and the second in 2021. The package would be one of the biggest fiscal undertakings since the pandemic and is double the previous supplementary budget from earlier this year.