“If I become the governor of the Bank of Korea, I will definitely work with the Financial Services Commission and the Financial Supervisory Service to resolve mid-to-long term household debt. The Bank of Korea must give a clear signal and play a role in policy efforts to catch the rate of increase in household debt in Korea, which is rising the fastest among OECD countries.”
Bank of Korea governor candidate Lee Chang-yong met with reporters in front of the task force office at the personnel hearing on the morning of the 1st and said, “Household debt is not a short-term risk factor because it is linked to real estate problems, but in the mid- to long-term, it affects the growth rate slowdown in Korea. It can be a huge burden,” he said. He also mentioned a plan in a broad framework, saying, “We need to make a soft landing of the household debt problem through interest rates.”
Candidate Lee then emphasized policy coordination with the government, saying, “As in the past, the structure of looking at prices only because the central bank is independent has changed a lot.”
He said, “It is natural that there is a conflict with the government because of different powers, and it is very important to adjust the variables under such conflict. You have to show and tune in, and this is a global trend,” he said.
Regarding the direction of monetary policy, he showed a neutral stance compared to his previous comments. On the way home on the 30th of last month, Lee said, “The Ukraine crisis has become a reality and should be taken into account” was interpreted as a dovish remark (preferring monetary easing). It means that we need to analyze whether it has a large impact on inflation or whether it has a greater impact on inflation, and come up with a way to combine it well with the Monetary Policy Committee members,” he said.
Candidate Lee continued, “It is not appropriate to divide them into hawks and doves,” he added.
Regarding inflation, “The first half is inevitably going to be higher than the 3.1% forecast, and I don’t really know the second half.” He said, “It depends on how long the Ukraine crisis will last and how high oil prices will continue. Even if this happens, we will have to focus on macroeconomic risk management in a situation of great uncertainty.”
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