Im Ji-won, Member of the Monetary Policy Committee, Retires: "Conflict Between Inflation and Growth May Intensify... Communication Is Key in Monetary Policy"

Im Ji-won, Member of the Monetary Policy Committee

On the 12th, Lim Ji-won, a member of the Financial Monetary Policy Committee of the Bank of Korea whose term ended, said in his farewell speech, "There will be many changes in the domestic and international economic environment going forward," adding, "The conflict between growth and inflation could intensify, and volatility in financial markets could lead to financial vulnerabilities." He also explained, "Communication with monetary policy stakeholders within the financial market may become increasingly important."

On the same day, Lim held a retirement ceremony at the Bank of Korea's main building conference room in Jung-gu, Seoul, officially concluding his term. Lim said, "I vividly remember the very first day I started at the Bank of Korea in 2018, being quite flustered upon hearing that an economic situation review meeting was scheduled and preparing for it, and now four years have already passed. Looking back, the past four years have been a period of rapid changes in domestic and international economic and financial conditions. Especially, the changes related to inflation trends have been astonishing."

He continued, "There will continue to be many changes in the domestic and international economic environment, and I expect macroeconomic uncertainties to remain quite high. Although our economy is fundamentally recovering from the COVID-19 shock, growth momentum is weakening, and various structural issues are constraining economic vitality."

Lim pointed out, "Moreover, as the high inflation rate prolongs, the conflict between growth and inflation is likely to intensify, and since accumulated financial imbalances have not been significantly resolved, the possibility that volatility in domestic and international financial markets could lead to financial vulnerabilities cannot be ruled out."

He explained that in such circumstances, communication with monetary policy stakeholders within the financial market will become more important. He said, "The Bank of Korea is an important policy provider, but since the effects of policies generally manifest through financial market channels, it can broadly be considered part of the market. Although policy tools are limited to adjustments such as the base interest rate, considering that the impact on the real economy varies depending on the financial market’s response, I believe that through accurate forecasting and analysis, various policy combinations can be created."

Lim also shared his thoughts on concluding his term. He said, "I deeply thank the fellow Monetary Policy Committee members and staff," adding, "The past four years, during which I engaged in candid discussions and intense deliberations with individuals armed with profound knowledge and a sense of mission regarding the real economy and financial markets to create good policies, have been an invaluable and honorable experience for me."

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