Jinil Kim, Monetary Policy Board Member, Admits "Hawkish Stance": Prefers Rate 0.125%p Above Average (Comprehensive)

Visited Press Room After Inauguration on May 15

"It Is Better for Interest Rates to Be Somewhat Higher

to Prevent Major Accidents in the Financial Sector"

Jinil Kim, the newly appointed member of the Monetary Policy Committee at the Bank of Korea, commented on May 15 regarding the market's assessment of him as a "hawk" (preferring monetary tightening), stating, "It is better for interest rates to be somewhat higher in order to prevent major financial accidents." In doing so, he effectively acknowledged his hawkish stance.

On the afternoon of the 15th, in Jung-gu, Seoul at the Bank of Korea, Kim Jin-il, a member of the Monetary Policy Committee (photo left), took a commemorative photo with Shin Hyun-song, the Governor of the Bank of Korea, after receiving his appointment certificate. Photo by Bank of Korea

After his inauguration ceremony that afternoon, Kim visited the Bank of Korea press room and said, "To prevent a major financial crisis, it may be better to raise interest rates by about half a notch, even if it means some sacrifice on the other side." He likened this approach to a kind of insurance, explaining, "Insurance exists because someone is bound to get into an accident or get hurt in the first place."

Kim also commented on his own response to the Monetary Policy Committee poll (outlook survey), saying, "My view is that the appropriate rate would be about half a notch, or approximately 0.125 percentage points, above the average or median." He explained that his perspective is shaped by his experience working at the U.S. Federal Reserve during the 2008 global financial crisis, adding, "That could be considered a good experience, or it could be a trauma."

Regarding the won-dollar exchange rate, which rose again above 1,500 won that day, Kim said, "Just as we don't know what the right level for the KOSPI is, the same applies to the exchange rate," emphasizing that it's not easy to discuss the appropriateness of exchange rate levels. He acknowledged that the recent high exchange rate poses challenges for the country, but pointed out that there are also beneficiaries, such as exporting companies, depending on their position. However, he stressed, "It is, of course, necessary to manage exchange rate volatility."

In his inauguration speech, Kim noted, "Concerns over inflation have heightened due to high oil prices resulting from the war in the Middle East," and added, "While the economic situation is improving, especially in the IT sector, uncertainty about global investment remains high, and domestically, issues such as polarization continue." From a financial stability perspective, he pointed out that household debt and housing price issues persist, and that there is growing concern about capital inflow and outflow risks due to increased global interconnectedness.

Kim stated, "Given the complex domestic and international conditions, I have come to realize just how challenging it is to achieve the central bank's core policy goal of 'contributing to the national economy through monetary and credit policy while paying attention to financial stability and pursuing price stability.'" He emphasized, "I will do my utmost to help achieve the goals of monetary policy by drawing on my research experience in the field of macroeconomics and my work experience at the Fed."

Kim, who was recommended by the Korea Federation of Banks as the successor to Hyun Song Shin on the Monetary Policy Committee, is recognized as one of the country’s leading experts in macroeconomics and monetary policy. Born in 1967, he earned both his bachelor's and master's degrees in economics from Seoul National University, followed by a Ph.D. in economics from Yale University. His practical experience includes serving as an economist at the Fed, adjunct professor at Georgetown University, and assistant professor in the Department of Economics at the University of Virginia. Beginning in 2003, he worked for seven years at the Fed as a senior economist. Since 2010, he has been a professor at the Department of Economics at Korea University. Kim's term on the Monetary Policy Committee runs until May 12, 2030.

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