"No Reason to Change Economic Outlook Due to Political Events... No Consideration for Interest Rate Cuts"
Lee Chang-yong, Governor of the Bank of Korea, evaluated on the 4th that "despite the state of emergency, the financial market is operating normally."
Governor Lee appeared on Bloomberg TV in the afternoon and responded to the host's question, "How do you view the current market situation?" by saying, "We have swiftly implemented market stabilization measures." He emphasized, "It is difficult to predict what political events may occur in the future, but we have experience in overcoming many difficulties so far."
Governor Lee introduced that he held an emergency macroeconomic and financial issue meeting (F4 meeting) with Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok, Financial Services Commission Chairman Kim Byung-hwan, and Financial Supervisory Service Governor Lee Bok-hyun. He explained, "This is a communication channel built over the past two years where all economic issues are decided," adding, "The meeting functioned well last night and again this morning." He also mentioned that the Bank of Korea's Monetary Policy Committee held an extraordinary meeting that day and decided to purchase non-regular repurchase agreements (RP) to supply short-term won liquidity.
Governor Lee dismissed the possibility of a base interest rate cut in response to the current situation. He stressed, "There is no reason to change the economic outlook due to this political incident," and added, "Structural changes such as the global value chain are more important in interest rate decisions."
Regarding overseas concerns about large-scale protests in the future, he said, "If the president had maintained martial law, it would have been an important variable, but martial law was lifted following the National Assembly's request." He continued, "Political uncertainty has somewhat decreased now," and said, "Korean citizens, politicians, and the political system are mature. Protests have always existed." He added, "There will be noise surrounding the president's impeachment, but the impact will not be significant."
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