Lee Bok-hyun "Separate Politics and Economy... Need Awareness of National Credit Rating"

The Financial Supervisory Service (FSS) has expressed its intention to separate politics from the economy and focus on the normal operation of the economy and finance despite political uncertainties. It also emphasized the need for awareness to maintain the national credit rating amid prominent domestic and international risk factors.

At a New Year's press conference on the morning of the 6th, Lee Bok-hyun, Governor of the FSS, stated, "The government and authorities should play their roles to separate politics and the economy and allow companies and finance to operate according to economic logic," adding, "Regardless of the political situation, it is important to ensure that the basic framework for maintaining people's livelihoods and economic momentum does not waver."

In particular, Governor Lee pointed out, "Whether under an acting authority system or a normal system, the public and political circles demand that neither the president, the Minister of Justice, nor the Minister of the Interior and Safety influence the judicial system or law enforcement agencies," and added, "It is inappropriate to make excessive claims based on individual political interests or to burden these institutions so that they cannot perform their roles."

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Governor Lee also highlighted external risk factors. He explained, "Looking at January events alone this year, there are issues such as how China will respond to the ripple effects of the new U.S. administration's trade policies, financial deregulation, and various virtual asset-related policies on the U.S. market, as well as the issue of yuan appreciation or depreciation." He continued, "In January, the Bank of Japan's monetary policy decision is scheduled, and as experienced last August, decisions related to yen carry trades are important," adding, "Maintaining interest rates is important, but the impact of bond operations is also a critical point."

He further emphasized, "The flow of economic policy throughout this year will have a significant impact on policy trends for the coming years," and stressed, "Even in the short term, the flow in the first quarter or January to February is important."

He also mentioned the importance of managing external creditworthiness. Governor Lee expressed concern, saying, "Recently, after France experienced a fiscal shutdown, its credit rating was downgraded," and added, "Even when it is not the regular reassessment period, we must be aware that international perspectives on our country can become cold whenever an event occurs."

Regarding financial market stability, he explained, "The exchange rate is moving in the range of 1,440 to 1,450 won, and sudden volatility is unconditionally bad in terms of forming interests and expectations, so there is no disagreement on the need to reduce it," adding, "If the exchange rate is not stable, there is no room for monetary policy, and it becomes difficult to make decisions that can provide additional help to the public during such difficult times."

He also emphasized the stability of livelihood finance. Governor Lee stated, "With the holidays approaching and considering the difficulties faced by vulnerable groups due to prolonged high interest rates and macroeconomic challenges, consumer protection cannot be emphasized enough," and added, "If there are any issues regarding illegal private loans, we will also look into them."

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