Rhee Chang-yong, governor of the Bank of Korea (BOK), ended his term on the 20th and said it is becoming increasingly difficult to achieve stability and growth in our economy with currency and fiscal policy alone.
At a farewell ceremony held at the Bank of Korea in Jung District, Seoul, that day, the governor said that even though the influence of currency and fiscal policy is gradually weakening along with changes in the economic structure, public expectations for the role of policymakers remain high due to past success, and stated accordingly.
He said that in the foreign exchange market, which in the past was largely influenced by capital inflows and outflows of foreign investors, the influence of residents such as domestic corporations, individuals, and the National Pension Service has now expanded significantly. He then said that if authorities try to manage the exchange rate only through foreign exchange market intervention or interest rate policy as in the past, without efforts to improve the reality institutionally, even greater side effects could occur.
The governor said it is fortunate that, thanks to the semiconductor boom, recent economic and foreign exchange market conditions are being managed stably to some extent. Even so, he said there are aspects that make it hard to view this as entirely positive, in that it shows the structural problem of excessive dependence on a specific industry and the resulting polarization is actually deepening.
As major achievements, the governor cited the following: ◇ lowering the inflation rate into the 2% range ahead of major Central Bank counterparts ◇ introduction of Korea-style forward guidance ◇ release of around 20 structural reform reports ◎ serving as chair of the Global Financial System Committee (CGFS) at the Bank for International Settlements (BIS) ◇ leading a decline in the household debt ratio ▲ and other accomplishments.
The governor took office as BOK governor in Apr. 2022 and completed his four-year term that day. If Shin Hyun-song, former head of the Monetary and Economic Department at BIS, nominated as the next governor, passes the National Assembly confirmation hearing, the term is expected to begin on the 21st. The National Assembly Strategy and Finance Committee will convene a full meeting at 2 p.m. that day to discuss the adoption of the confirmation hearing report on nominee Shin.