Controversy Over 'Won as Key Currency'... Bank of Korea Governor Says "Inappropriate to Mention as Political Issue"

Lee Ju-yeol, Governor of the Bank of Korea, is presiding over the Monetary Policy Committee's main meeting on the monetary policy direction for February 2022, held on the morning of the 24th at the Bank of Korea in Jung-gu, Seoul. (Photo by Bank of Korea) [Image source=Yonhap News]

Lee Ju-yeol, Governor of the Bank of Korea, recently avoided commenting on the possibility of the Korean won being included as a key currency, which has become a political controversy.

At a press conference held immediately after the Monetary Policy Committee meeting at the Bank of Korea in Jung-gu, Seoul, when asked about the possibility of South Korea entering the group of key currency countries, Governor Lee said, "It has already become a political issue to explain the economic meaning" and added, "With the presidential election approaching, it is not appropriate for me to comment." ?

When asked about the presidential candidate's claim that 'As Korea can become a key currency country, it is acceptable for the national debt ratio to rise to 100%', Governor Lee responded, "No matter how much I explain from an economic perspective, it could lead to unintended consequences," and said, "It is not appropriate to answer."

However, Governor Lee explained, "For the won to maintain its competitiveness internationally, above all, the fundamentals of our economy must be strong," and "Additionally, expanding infrastructure and establishing institutional foundations must accompany this to enhance competitiveness and allow the won to be widely used in international settlements."

Earlier, on the 21st, during the 20th presidential election TV debate, Lee Jae-myung, the Democratic Party presidential candidate, responded to Ahn Cheol-soo of the People’s Party asking, "Do you know the difference between key currency countries and non-key currency countries?" by saying, "Of course, I do. Our economic strength is solid enough that we have a very high possibility of being included as a key currency country."

During a heated exchange with Yoon Seok-youl, the People Power Party candidate, Lee also said, "There have been reports that we are likely to become a key currency country soon." This statement emphasized that South Korea’s national debt ratio relative to its gross domestic product (GDP) (50.1%) is relatively low, suggesting room for expansionary fiscal policy, but the feasibility of this claim sparked controversy.

Meanwhile, regarding the government and ruling party’s supplementary budget formulation, Governor Lee said, "There is naturally concern that expanding the supplementary budget and increasing fiscal spending might further stimulate inflation," but added, "The purpose of this supplementary budget is not to boost the overall economy but to support small business owners affected by the spread of COVID-19, so its impact on inflation will be limited."

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