Anchor: South Korea vows to monitor the market as uncertainty grows following the U.S. central bank’s decision to raise its key interest rate.
Barry Welsh has more.
 
Report: The U.S. central bank has raised the benchmark interest rate for the third and final time this year, as widely expected.
 
The U.S. Federal Reserve on Wednesday announced its decision to raise key interest rates by a quarter of a percentage point to a range of one-point-25 percent to one-point-50 percent. 
 
Federal Reserve Chairperson Janet Yellen explained the decision:
 
[Sound bite: Federal Reserve Chairperson Janet Yellen]
“This is the first time in many years that we've seen that inflation around the world is generally low. So, I think, the risks are balanced, and there's less to lose sleep about now than has been true for quite some time."
 
The Federal Open Markets Committee, the Fed's rate-setting body, said in a statement it expected that "economic activity will expand at a moderate pace and labor market conditions will remain strong." 
 
The Fed projected three more hikes next year. Yellen said that the committee expects the rate to move up to the Fed's two percent target "over the next couple of years."
 
South Korea vowed to monitor the situation and respond to any uncertainty proactively. 
 
Vice Finance Minister Ko Hyoung-kwon said on Thursday during a meeting of chiefs of economy-related ministries that uncertainties from the U.S. rate hike are significantly large and the government will proactively deal with them.
 
The vice minister said that the South Korean economy is maintaining solid growth, but there is a need to properly manage risk factors to keep the pace of growth stable.
 
He said that the government will closely monitor movements in major countries, fluctuations in the market and the foreign exchange rate. 
 
Bank of Korea Governor Lee Ju-yeol was less concerned saying he doesn't expect the U.S. rate hike to have a specific impact on South Korea.
 
Lee told reporters on his way to work on Thursday that the increase was expected and that there was no change in the Federal Reserve's hike projections for next year.
 
The upper end of the Fed’s target is on par with the Bank of Korea's benchmark rate.
 
Asked whether a possible reversal in interest rates between South Korea and the U.S. could affect the BOK's monetary policy, Lee said the bank will make a comprehensive assessment of the domestic economy, prices, financial stability and risks.
Barry Welsh, KBS World Radio News.