Lee Chang-yong "Impeachment's Economic Impact Limited... Inflation Expected to Remain Stable"

Lee Chang-yong, Governor of the Bank of Korea, Holds Press Conference on Inflation Targeting Operation Status

Bank of Korea Governor Lee Chang-yong is attending the plenary meeting of the Planning and Finance Committee held at the National Assembly on the 17th, responding to questions from lawmakers. Photo by Kim Hyun-min

Lee Chang-yong, Governor of the Bank of Korea, assessed that the current impeachment situation has a limited impact on our economy. He also expected consumer prices to stabilize around the future target level of approximately 2%.

At a 'Price Stability Target Operation Status Review Press Conference' held at the Bank of Korea in Jung-gu, Seoul on the afternoon of the 18th, Governor Lee diagnosed, "Since the declaration of martial law, volatility in the domestic financial and foreign exchange markets has greatly increased but is gradually stabilizing."

He added that although uncertainty still remains following the approval of the impeachment motion in the National Assembly last weekend, the future political schedule has become somewhat clearer.

He emphasized, "As with the previous two impeachment situations, if economic policies are implemented separately from the political process and trust is maintained that the economic system operates normally, the impact of political uncertainty on the economy will be limited even if it persists for a certain period."

He continued, "At this time, it is more important than anything else for our people to return to their daily lives and carry out normal economic activities rather than shrinking in vague fear."

Regarding next year's inflation, he forecasted stability at the inflation target level of 2%. He said, "The consumer price inflation rate reached the target level of 2% in August, and since then, it has remained in the 1% range, further solidifying the foundation for price stability. The consumer price inflation rate is expected to stabilize around the target level of 2% next year."

He also explained, "We have decided to maintain the price stability target system, which currently aims for 2%, until the next review. This decision considered the fact that the price stability target system has been evaluated as effective in responding to high inflation after the pandemic not only in our country but also in major countries, and the expectation of a price stabilization trend over the next one to two years."