IMF Delegation Chief: "To Prevent Moral Hazard, Selectively Support Market Stabilization Measures"

Choo Kyung-ho "Focus on Price Stability and Fundamental Improvement"

Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho is having a video meeting with the IMF annual consultation delegation at the Government Seoul Office in Jongno-gu, Seoul on the 5th.

Herald Finger, head of the International Monetary Fund (IMF) annual consultation delegation, emphasized on the 5th that “market stabilization measures should be provided temporarily and selectively to prevent potential moral hazard.”

According to the Ministry of Economy and Finance, Herald held a video conference with Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho and made these remarks. The IMF reviews the overall economic situation of member countries according to agreements. Herald arrived in Korea on the 24th of last month and will depart on the 6th of this month. This meeting was arranged for Herald to explain the results of the annual consultation to Deputy Prime Minister Choo and to exchange opinions on major issues in Korea.

Regarding the recent Saemaeul Geumgo incident, Herald said, “The government’s swift response helped successfully alleviate financial instability.” On the housing market, he evaluated that “measures such as easing real estate regulations and tax reductions contributed to stabilizing (soft landing) real estate prices.” However, Herald’s analysis is that such policies should be provided temporarily and selectively to avoid causing moral hazard.

Herald also stated that the government’s tight fiscal policy for price stabilization is “an appropriate direction” and argued that “the tightening stance should be continuously maintained for the time being.”

Deputy Prime Minister Choo said, “Despite difficult economic conditions, we plan to focus on price stabilization and improving economic fundamentals in our policies,” and added, “We will do our utmost to support private economic activities so that the Korean economy can rebound in the second half of this year.”

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