South Korea's central bank chief said on Wednesday that the country's monetary policy rate cannot be slashed to zero percent anytime soon because the bank needs policy space to back ongoing corporate restructuring.
"We have limits that keep us from going to zero rates," said Bank of Korea Governor Lee Ju-yeol in a lecture at parliament.
"In case of sudden market volatility we have to scrutinize foreign flows. It may seem we are acting slowly but there is much for us to think about and consider."
Lee said the bank had to look at growth and financial conditions, as well as the ongoing restructuring of the country's massive shipping and shipbuilding industries, when changing its base rate - currently a record low 1.25 percent.
South Korea expects a 20 percent drop in major shipbuilders' capacity and a 30 percent drop in their workforce by 2018 from 2015, after the restructuring process.