BOK chief nominee vows to consider growth, inflation, financial instability 'in balancing manner'

All News 09:24 March 24, 2022

SEOUL, March 24 (Yonhap) -- Rhee Chang-yong, the nominee for chief of the Bank of Korea (BOK), said Thursday he will carry out monetary policy by taking into account economic growth, inflation and financial stability "in a balancing manner," if confirmed to lead the central bank.

Rhee, director of the Asia and Pacific department at the International Monetary Fund (IMF), was nominated as new central bank chief Wednesday to replace Lee Ju-yeol, who is to leave office later this month. Rhee is currently in Washington and expected to return to South Korea next week to prepare for a confirmation hearing.

"There is a growing possibility that the spread of the omicron variant in China could slow down its economy at a time when the U.S. Federal Reserve is speeding up its monetary policy normalization," Rhee said in remarks sent via the BOK. "Since the Ukraine situation is unfolding in a way that it is hard to predict what will happen even a step forward, it is not easy to project its impact on domestic and global economies."

"With external uncertainty mounting, worries are growing that domestic inflation and economic risks could heighten," he added. "I will intensively think about carrying out monetary policy by looking into growth, inflation and financial stability in a balancing manner."

This marked his first public remarks since he was picked as new central bank chief.

Rhee is known for having a deep understanding of financial markets and policymaking based on his accumulated experience, as he worked at global institutions such as the IMF and served as deputy chief of the Financial Services Commission, South Korea's top financial regulator.

But little is known as to whether he is hawkish or dovish when it comes to monetary policy, since he has not been involved in central bank affairs.

His appointment comes as the BOK is grappling with rising inflation pressure driven by global supply chain disruptions and rising demand from consumption recovery from the pandemic.

The BOK has raised its key interest rate three times, including the latest 0.25 percentage point rise in January, after borrowing costs were kept at record lows for about two years to shore up the pandemic-hit economy. It has hinted at further rate hikes in the months to come.

Some raise concerns Rhee might not be able to take the job on April 1, a day after the incumbent chief leaves office. Rhee needs to go through a parliamentary confirmation hearing, widely seen as a formality because his formal appointment does not require endorsement from the National Assembly.