* FinMin reiterates need for expansionary policy
* C.bank chief: to raise rates in "not too distant future"
* C.bank chief: private-sector recovery critical
* No change to analysts' view rates likely to rise in H2 (Updates with analysts, more details, markets)
By Yoo Choonsik
SEOUL, Feb 17 (Reuters) - South Korea's finance minister said on Wednesday the government wanted to keep policy geared towards boosting growth, suggesting markets should shrug off the central bank chief's latest remarks that rates needed to rise soon.
The finance ministry, which has publicly opposed an early interest rate increase, has been sending a representative to the central bank's policy meeting since January, forcing the Bank of Korea to ease back its tone on the policy outlook.
"The global economy is slowly recovering but uncertainties related to external conditions have increased due to the recent debt worries in Europe," the ministry said in a report to a parliamentary committee.
"(The government) will maintain an expansionary macroeconomic policy stance for the time being...and (financial authorities) will maintain the currently expansionary financial policy stance as well."
Finance Minister Yoon Jeung-hyun testified before the same committee but did not comment on the interest rate policy.
Bank of Korea Governor Lee Seong-tae said that the central bank would likely start raising interest rates in the near future when it confirms a self-driven recovery in the private sector.
"I think (the central bank) has to start raising interest rates once the private sector's self-driven recovery is confirmed," Lee told the committee.
"I think it will happen in the not too distant future," he said. Lee, whose term ends at the end of March, refused to comment when asked if the central bank would raise rates as early as its next policy meeting on March 11.
NO HIKE BEFORE H2
Analysts said Lee's remarks were more hawkish than those made at the central bank's policy review last week, but did not alter views that rates will not rise until the second half of the year.
"The BOK sees the private sector has secured self-recovery power, but the government does not agree. Given the recent uncertainties on the economy, the government's stance on the rate policy will get more support (from investors) than the BOK," said Kim Jae-eun, an economist at Hyundai Securities.
Lee first sent a strong signal in September last year that he was ready to lift interest rates as early as in October in the face of rising property prices, and then stepped up his rhetoric again in December as the economy showed signs of a quick recovery from the downturn.
His latest comments were made after the market had closed. Over the past month, investors have been gradually scaling back chances of an early rate rise, narrowing the spread on 1-year interest rate swap rates over the 3-month certificate of deposit rates to its smallest since June last year.
Last week, the Bank of Korea warned of considerable uncertainties in the economic outlook, citing Europe's debt woes, prompting analysts to push back expectations for a rate rise to the second half of the year.
Eight out of the 15 analysts surveyed after last week's review forecast the Bank of Korea would raise interest rates during the second half of the year. A slight majority had predicted an increase in the first half in the previous poll.
The Bank of Korea has kept the benchmark rate at record-low 2.0 percent for 12th consecutive months. (Additional reporting by Cheon Jong-woo; Editing by Kazunori Takada)