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BOK voices reservation over Park's remark on quantitative easing

All News 16:22 April 29, 2016

SEOUL, April 29 (Yonhap) -- A senior official of South Korea's central bank expressed his reservations on Friday over quantitative easing efforts recently proposed by President Park Geun-hye, saying that they require public consensus.

"If the central bank has to play a fiscal role by making use of its money-minting authority, I think that there should be public or social consensus for it," BOK deputy governor Yoon Myun-shik said in a meeting.

"No matter how urgent it might be, I think following a due procedure is in line with what the BOK stands for... The due procedure here is to form a public or social consensus," he added.

His remarks could be seen as a thinly-veiled opposition to Park's stance on quantitative easing and a possible role by the central bank in that process.

On Tuesday, Park said at a meeting with chief editors of major newspapers and broadcasters that it is time to "think positively" about Korean-style quantitative easing to help secure money needed to push for corporate restructuring deemed to be critical in revitalizing the economy.

A possible use of the central bank's money-issuing authority has been cited as a way to secure money to be granted to state policy banks leading the corporate restructuring drive.

Some economic experts, however, have raised worries over the government's possible misuse of the money-issuing authority. BOK Governor Lee Ju-yeol also has expressed similar views, saying that the central bank will do what is necessary, but within its legal boundaries.

"The BOK also thinks that structural overhaul and corporate restructuring are key to beefing up our economic growth potential," Yoon said. "But the currently discussed quantitative easing is to be different than the quantitative easing that BOK officials are usually talking about."

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