Lee Chang-yong, Candidate for BOK Governor, "Macroeconomic Stability is Top Priority"

Returning from the US for Confirmation Hearing

[Image source=Yonhap News]

[Asia Economy Reporter Seo So-jeong] On the 29th (local time), Lee Chang-yong, the nominee for Governor of the Bank of Korea, stated, "I will do my best to ensure that our macroeconomy remains stable."

Lee, who departed for Korea on the same day to prepare for the confirmation hearing, met with reporters at Dulles International Airport near Washington DC, USA, and said, "I am personally honored to be nominated as the (Bank of Korea Governor)." Lee is scheduled to return to Seoul in the afternoon, take a day of rest, and then start working at the confirmation hearing task force (TF) office in the Booyoung Taepyeong Building, Jung-gu, Seoul, from the 1st of next month.

The Bank of Korea, which has officially begun preparations for Lee's confirmation hearing, announced that when the current Governor Lee Ju-yeol's term expires on the 31st, Deputy Governor Lee Seung-heon will act as interim governor until Lee Chang-yong formally assumes office. Additionally, if Lee's confirmation hearing, scheduled for the 14th of next month at the Monetary Policy Committee, is not completed, Monetary Policy Committee member Joo Sang-young will serve as acting chairperson.

Although Lee has recently emphasized his determination to find a balance between high inflation and economic slowdown, formulating monetary policy is expected to be challenging. The need to raise interest rates is growing due to soaring prices, but domestic and international conditions are not favorable.

Since August last year, the Bank of Korea has raised its benchmark interest rate three times in advance of US rate hikes. However, recently, Jerome Powell, Chairman of the US Federal Reserve (Fed), hinted at the possibility of a 'big step' of raising the benchmark interest rate by 0.5 percentage points at once in May, highlighting the need for closer and faster responses going forward. With external uncertainties such as the Russia-Ukraine war and the slowdown of the Chinese economy at unprecedented levels, international insight is more important than ever.

The domestic situation is also a dilemma. The Presidential Transition Committee is pushing forward with an additional supplementary budget of 50 trillion won to compensate small business owners for losses, leading to expectations of a significant increase in government bond issuance, causing bond yields to soar daily. In a phase of rising inflation, expanding deficits further increase inflationary pressures. Given that inflation in the 4% range could become a reality due to rising raw material prices caused by the Ukraine crisis, more cautious monetary policy management is inevitably required to prepare for various variables.

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