[2020 National Audit] Lee Ju-yeol "High Uncertainty in Growth Path... Maintaining Accommodative Monetary Policy"

16th National Assembly Planning and Finance Committee 'Bank of Korea Audit'
Governor Lee: "Consumer Price Inflation Will Fluctuate Temporarily... Will Rise When Economy Improves"

Bank of Korea Governor Lee Ju-yeol attended the full meeting of the National Assembly's Finance and Economy Committee on the 24th and reported on business matters. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Jang Sehee] Lee Ju-yeol, Governor of the Bank of Korea, diagnosed that the uncertainty of the future growth path remains high due to the domestic resurgence of the novel coronavirus infection (COVID-19).

Governor Lee stated this on the 16th during his opening remarks at the National Assembly's Planning and Finance Committee audit, saying, "Since mid-August, the domestic resurgence of COVID-19 has caused a slowdown in the recovery trend."

He added, "Going forward, the domestic economy is expected to recover moderately, centered on exports, as the global economy gradually improves."

Regarding the global economy, he forecasted, "A moderate improvement trend is expected to continue mainly in major countries such as the United States and China, but the uncertainty surrounding the speed and pattern of recovery remains very high."

He also expressed his intention to maintain an accommodative monetary policy stance. He said, "The Bank of Korea plans to operate monetary policy accommodatively to support the recovery of the domestic economy," adding, "We will closely monitor the impact of the COVID-19 developments on domestic and international finance and economy, as well as the ripple effects of the policy responses implemented."

On the 14th, the Bank of Korea held a Monetary Policy Committee meeting and decided to keep the base interest rate at 0.50%, maintaining an accommodative monetary stance. This was intended to respond to the increased downside pressure on the economy due to the second wave of COVID-19.

Regarding the recent consumer price inflation rate, which recorded around 1%, Governor Lee said, "Consumer prices significantly slowed their rise after the spread of COVID-19 due to falling international oil prices and low demand pressure, but in September, the inflation rate reached 1.0% influenced by a sharp rise in agricultural product prices."

He stated, "Going forward, the consumer price inflation rate is expected to fluctuate at a low level for some time, then gradually increase from next year as the impact of falling international oil prices disappears and the economy improves."

Furthermore, he evaluated that the financial and foreign exchange markets have generally shown stable movements since late March, supported by active policy responses. He said, "The 3-year government bond yield has shown a stable trend in the 0.8?0.9% range since May," and "stock prices have recovered to pre-COVID-19 levels." He also assessed that the won-dollar exchange rate has maintained a downward stabilization trend since May.

This content was produced with the assistance of AI translation services.