Outgoing Lee Ju-yeol "A Clever Strategy Needed to Maintain Growth While Ensuring Financial Stability and Controlling Inflation"

In Farewell Speech, Calls for Adapting to the New Normal... Flexible Thinking Solutions

Lee Ju-yeol, Governor of the Bank of Korea, is being seen off by employees on his last commute after the farewell ceremony held at the Bank of Korea in Jung-gu, Seoul on the 31st. Photo by Moon Ho-nam munonam@

[Asia Economy Reporter Seo So-jeong] "A clever solution is required to maintain growth while ensuring financial stability and controlling inflation."

On the 31st, Lee Ju-yeol, who is leaving the Bank of Korea after an 8-year term, held a farewell ceremony and stated, "Adapting to the new normal is an unavoidable challenge even for central banks."

The governor reflected, "During most of my 8-year term, I believe monetary policy was conducted in a very unfamiliar new macroeconomic environment, quite different from previous experiences or knowledge," adding, "Despite prolonged accommodative monetary policy following the global financial crisis, the world economy struggled to escape low growth and low inflation, which was enough to prompt calls for rewriting economics textbooks."

He said, "This puzzle became even more complex and enigmatic like a higher-order equation during the COVID-19 pandemic," and added, "With financial imbalances worsening due to household debt accumulation and inflation reappearing after seemingly disappearing post-financial crisis, we could not help but reconsider what an appropriate policy framework for stable economic growth should be."

Accordingly, Governor Lee emphasized that only flexible thinking suited to the changing times can wisely solve these difficult problems. He also mentioned the need to consider expanding the role of the central bank.

He noted, "Where the role of the central bank should extend is another matter of concern," and said, "Recently, as social interest in employment has increased, discussions are underway on how to reflect this in monetary policy operations." He continued, "While some voices call for the central bank's participation in quasi-fiscal activities, as economic prescriptions are increasingly sought to solve various social issues, expectations and reliance on the central bank will continue to grow."

Governor Lee urged, "In preserving the central bank’s inherent identity, in-depth research and discussion must be conducted on how to establish its future role." Furthermore, he stressed, "Public trust can only be earned through consistent and predictable policy operations," and called for continuous communication to avoid missing the right timing for policy decisions based on insights into the current situation and future trends.

Reflecting on the end of his term, Governor Lee said, "It feels like submitting the answer sheet for the last exam during my school days," adding, "There is relief after finishing a long-prepared exam, but upon reviewing the answers, there is inevitably regret ? the lingering thought of 'I could have done better'." Lastly, he added, "Every moment at the Bank of Korea, which has been my entire life for the past 43 years, and the last 8 years as governor, will never be forgotten."

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