(LEAD) One member votes against rate cut in Aug.: minutes

(ATTN: ADDS details in paras 4-5, 7-8)
By Lee Minji

SEOUL, Sept. 2 (Yonhap) -- One member of the central bank's monetary policy committee opposed a majority decision last month to cut the rate for the first time in 15 months, Bank of Korea (BOK) minutes showed Tuesday.

Moon Woo-sik, a member of the seven-person policy board led by BOK Gov. Lee Ju-yeol, voted for a rate freeze, citing that the country's economy is on a modest recovery track and shifting away from the impact of the deadly ferry Sewol sinking.

On Aug. 14, the monetary policy committee decided to cut the base rate by a quarter percentage point to 2.25 percent, highlighting the need to prevent weak consumer sentiment from developing into actual problems.

South Korea's consumer sentiment index sank to an eight-month low of 105 in May following the April 16 Sewol disaster that left more than 300 people dead or missing, most of them high school students on a school excursion. The index slightly recovered in June but retreated to 105 in July.

Moon was quoted as saying that the Korean economy has mostly overcome the shock from the ferry sinking, citing solid exports in June and July as well as the country's improving output.

Moon, who began his three-year term in April 2012, was nominated by then-central bank Gov. Kim Choong-soo.

The minutes showed that one board member raised the need for a 0.2 percentage point cut rather than 0.25 percentage point, stating future uncertainties. The official declined to be identified in the minutes.

This board member said the effect of an additional rate cut is likely to be limited under the current accommodative situation. He also warned against a potential hike in household debt in regard to the government's recent measures to ease mortgage rules.

Details of the monthly rate-setting meeting are disclosed via the minutes released roughly three weeks after the meeting. The identities of the members who commented and their voting directions are also kept anonymous unless they dissented from the majority decision.

The policy committee is set to hold its next rate-setting meeting on Sept. 12.

mil@yna.co.kr
(END)