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.
Shin Hyun-song considered pragmatic hawk with global clout by investment banks
Shin Hyun-song, then-economic adviser at the Bank for International Settlements (BIS), delivers a keynote speech at a conference jointly hosted by BIS, the Financial Services Commission and Bank of Korea in Seoul, December 2024. Newsis
By Lee Yeon-woo
HONG KONG — Global investment banks see Shin Hyun-song, nominee for Bank of Korea (BOK) governor, as a pragmatic hawk likely to prioritize financial stability while raising the central bank’s global profile.
"Though his views will come into closer view at the parliamentary confirmation hearing, Shin’s past remarks, coupled with Korea’s macroeconomic conditions, suggest he will take a relatively hawkish policy stance," said Kang Min-joo, senior economist for Korea and Japan at ING.
Kathleen Oh, Morgan Stanley’s chief economist for Korea and Taiwan, echoed the view, citing Shin’s remarks at a G20 conference in September 2022. At the event, Shin said "central banks’ most urgent task is to stabilize inflation," and has strongly argued for the need for preemptive inflation controls.
Along with aiming to keep inflation around target, Barclays economist Son Bum-ki said, Shin’s monetary policy framework is likely to focus on both domestic and global credit cycles, while remaining cautious about financial imbalances as a byproduct of policy. He added that Shin’s appointment could help the central bank keep pace with global and academic developments.
"We believe Dr. Shin has earned great respect from the academia and BOK staff through his active involvement in domestic seminars and vigorous academic interactions with BOK staff," Son said.
Benson Wu, Korea and China economist at Bank of America Global Research, said Shin’s global experience could support a more coordinated and modern policy framework at BOK.
Upon his appointment, Shin’s immediate challenge will be navigating uncertainties tied to the Iran conflict, analysts said, as the Korean won has undergone sharp depreciation and rising oil prices have led to inflationary pressures. On Monday, the Korean won tumbled to a 17-year low, sliding past 1,510 won per dollar.
"Recent geopolitical tensions in the Middle East have heightened volatility not only through trade disruptions and energy security concerns, but also across global asset markets including FX (foreign exchange), rates, commodities and equities, leaving Korea particularly exposed," Wu said.
Adding to the uncertainty, two Monetary Policy Board seats will also turn over in the coming months, as the terms of Shin Sung-hwan and Ryoo Sang-dai end May 12 and Aug. 20, respectively.
The current Bank of Korea Governor, Rhee Chang-yong, will end his term on April 20, following the April 10 monetary policy meeting. Shin is set to undergo a parliamentary hearing before his formal appointment, and is expected to preside over his first monetary policy meeting on May 28.
On Sunday, President Lee Jae Myung nominated Shin, a former economic adviser at the Bank for International Settlements, to lead the BOK. Shin has taught at Princeton, Oxford and the London School of Economics, and advised former President Lee Myung-bak on international finance in 2010.
In response to the nomination, Shin said he will "consider how to operate a balanced monetary policy, taking into account inflation, growth and financial stability."