Lee Yeon-woo is a financial journalist at The Korea Times. Her wide range of reporting includes policies, macroeconomics, stock market, companies and even crypto. She is passionate about connecting the dots in Korean finance and making it easier for foreign nationals to understand. Based on her previous experience as a national reporter, she also has a keen interest in social issues within the sector, including gender equality and ESG. Your tips and insights are always appreciated. You can send them to yanu@koreatimes.co.kr.
BOK's monetary policy board to undergo major reshuffle in April
Bank of Korea Governor Rhee Chang-yong, center, presides over a monetary policy board meeting at the central bank's headquarters, in this November 2023 photo. Yonhap
By Lee Yeon-woo
The Bank of Korea's (BOK) monetary policy board is expected to undergo a major reshuffle as the terms of two of its board members are set to expire this April. This follows the recent departure of Park Chun-sup, a former board member who is now serving as senior presidential secretary for economic affairs.
According to the BOK, Sunday, the process of nominating Park's successor is underway. Park, whose term was scheduled to end in April 2027, vacated the position after just 7 months, following his appointment as presidential secretary. The new appointee will serve the remainder of Park's term, which is three years and five months.
The appointment process is expected to be time-consuming due to the comprehensive verification process. Additionally, with the general elections approaching, there is a risk that these appointments could be deprioritized. The board members are appointed by the South Korean president.
Therefore, in the upcoming meeting scheduled for Thursday, only the remaining six members will participate. Since the monetary policy committee operates on a consensus basis, it can make decisions on monetary policy even with one seat vacant.
On April 20, two additional rate-setting members, Emeritus Professor Cho Yoon-je from Sogang University and former Deputy Governor of the BOK Suh Young-kyung, will also vacate their positions.
Considering that three out of the seven members of the monetary policy board are set to be replaced in the first half of 2024, market observers are cautiously predicting a potential shift in the direction of future monetary policies.
Both Park and Cho are recognized for their strong hawkish stances. Similarly, Seo has shown support for a series of interest rate hikes, indicating a hawkish inclination. However, under the current government, in order to prioritize the revitalization of the economy, the newly appointed members are expected to favor a more accommodating monetary policy stance.
"The vacancy in the monetary policy committee is a factor that heightens market anxiety. A swift completion of the appointment process is required," an industry official said.