Eonju Lee: "Bond and Stock Markets in Turmoil Over Careless Remarks by Bank of Korea Governor"

Eonju Lee, Supreme Council Member of the Democratic Party of Korea, criticized Bank of Korea Governor Changyong Lee for mentioning the possibility of a shift in monetary policy direction during a foreign media interview, calling it "careless."

Eonju Lee, Supreme Council Member of the Democratic Party of Korea, is speaking at the National Assembly plenary session. Photo by Yonhap News Agency

On November 16, Assemblywoman Lee stated on Facebook, "Due to the Bank of Korea Governor's careless remarks, the domestic bond, stock, and foreign exchange markets were all in turmoil over the weekend," adding, "Even abroad, it is rare to see a central bank governor speak so directly about interest rate issues."

On November 12, Governor Lee said in an interview with Bloomberg TV, "The scale and timing of a rate cut, and even the possibility of a policy shift, will depend on the new data we will see."

This remark, interpreted as hinting at the possibility of pausing or even raising interest rates, led all government bond yields except for the one-year note to reach their highest levels of the year in the domestic bond market.

Assemblywoman Lee stated, "'Pausing rate cuts' is one thing, but saying 'we could shift to a rate hike stance' goes too far for a central bank governor," adding, "Many domestic investors likely suffered losses as a result of this statement."

She continued, "He also expressed a willingness to intervene in the foreign exchange market, but for the Bank of Korea Governor, who is not the Minister of Economy and Finance, to make such a statement is crossing the line."

Assemblywoman Lee also criticized Governor Lee for continuing to comment on areas outside of monetary policy, such as education and real estate, saying, "Why is he carelessly handling his own responsibilities while focusing on irrelevant issues? If that's the case, he should step down as Governor and focus on social policy research."

Back in June, Assemblywoman Lee criticized Governor Lee for stating at the Korea Federation of Banks that "under the current trend of rate cuts, it is an important time for banks to manage household debt stably to prevent risks related to the housing market and household loans from expanding again," emphasizing, "Every word from the Bank of Korea Governor can influence the market as verbal intervention, so he must be extremely cautious."