UPDATE: One Of 7 BOK Members Opposed Aug Rate Hike - Minutes

UPDATE: One Of 7 BOK Members Opposed Aug Rate Hike - Minutes

(Adds comments by central bank policy board members) SEOUL (Dow Jones)--One out of the seven Bank of Korea policy board members voted for an interest-rate freeze in August and urged the central bank to closely monitor the global fallout from the U.S.

subprime mortgage crisis, according to minutes of the central bank meeting released Thursday. Kang Moon-Soo was the sole board member who was against the August move to hike the overnight call rate target by 25 basis points to 5.00%. At the subsequent September meeting, the BOK held its overnight call rate steady. Kang believed in August that the U.S.

subprime crisis was having a limited impact on both the local and overseas economies, but he added, "the possibility of global market instability needs to be closely monitored as it could have a negative impact on the local economy," according to the central bank minutes. Although most members acknowledged in early August that shockwaves from the subprime crisis were imminent, they believed that the local impact wouldn't be significant. The board members who voted for the rate increase said the economy appeared to be on a path to sustained recovery and expressed concern that inflationary pressures would rise over time.

"Inflation maintains stability while housing prices look generally stable.

However, the upside risk of inflation has risen due to global raw materials costs and liquidity conditions, and that needs to be dealt with preemptively," the BOK quoted one unnamed member as saying. Another member said that liquidity remained high despite previous hikes to 4.75%, a policy rate which was still "favorable" to growth. The next Bank of Korea policy interest rate review is scheduled Oct.

11. -By Jung-Ah Lee, Dow Jones Newswires; 822-732-2165;jung-ah.lee@dowjones.com (END) Dow Jones Newswires
From: FXPR.com