Lee Chang-yong, Governor: "Growing Financial and Economic Uncertainty... Precise Policy Response Needed"

Lee Chang-yong, Governor of the Bank of Korea, is explaining the base interest rate hike at a press briefing held at the Bank of Korea in Jung-gu, Seoul, on the 13th of last month. (Photo by Joint Press Corps)

Lee Chang-yong, Governor of the Bank of Korea, stated, "This year as well, we will focus on price stability in conducting monetary policy," adding, "given the very high uncertainty in domestic and international financial and economic conditions, we believe a more sophisticated policy response is necessary."

Prior to reporting to the National Assembly's Planning and Finance Committee on the 21st, Governor Lee explained, "There is considerable uncertainty regarding the final interest rate level and duration of major countries' monetary policies, including the U.S. Federal Reserve (Fed)."

Governor Lee said, "It is difficult to predict how quickly inflation will slow down depending on developments such as China's reopening and the Ukraine war," and "in addition, the recovery level of the Chinese economy and the global IT sector, as well as the contraction of the domestic real estate market, are increasing the difficulty in forecasting future economic trends."

However, regarding the future direction of monetary policy, Governor Lee was reserved, stating, "The monetary policy decision meeting is scheduled in two days."

He continued, "If unexpected financial or foreign exchange market instability recurs, we will respond promptly under close policy coordination with the government and supervisory authorities, as we did last year," and "furthermore, the Bank of Korea will proactively respond to the acceleration of the economy's digital transformation and actively strive to contribute to balanced regional development."

Governor Lee emphasized, "We will review various use cases of central bank digital currency and strengthen cooperation with the government and international organizations to establish legal and institutional foundations," and "also, the Bank of Korea's regional offices will work hard to contribute practically to regional community development by proposing effective policies through customized regional research as top think tanks."