Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Finance minister, Bank of Korea chief vow to maintain accommodative policy
Finance Minister Hong Nam-ki, left, talks with Bank of Korea Governor Lee Ju-yeol at the Korea Federation of Banks headquarters in Seoul, Thursday, before the beginning of a macroeconomic meeting. Yonhap
By Lee Min-hyung
By Lee Min-hyung
Finance Minister Hong Nam-ki and Bank of Korea (BOK) Governor Lee Ju-yeol reaffirmed their stance to maintain an expansionary fiscal and accommodative monetary policy as the nation's economy remains vulnerable to the impact of a third wave of the coronavirus.
Thursday's meeting marked the first time in a year that the leaders of the central bank, finance ministry and two financial regulators gathered to discuss joint strategies for dealing with the impact of the pandemic. At the last meeting in February 2020, the officials pledged to join hands to tackle the emerging coronavirus crisis.
A year later, addressing the continuing impact of the pandemic remains at the top of their priority lists.
“The third wave of the pandemic hasn't shown any clear signs of easing and it keeps inflicting damage across the country,” Hong said during a macroeconomic meeting with the BOK chief and leaders of financial authorities, Thursday.
The finance minister added that the government plans to push for 495 trillion won ($447.9 billion) in policy financing, or loans with a specific purpose or target, to help support people suffering economically following the COVID-19 outbreak.
Korea's financial authorities and the central bank agreed to implement a strong set of expansionary policies to rev up the virus-hit economy for a year after the COVID-19 spread began here.
The BOK cut its key benchmark rate down to a record-low 0.5 percent and the finance ministry initiated a fourth supplementary budget to aid households and small businesses hit hard by tightened social distancing restrictions to curb the coronavirus outbreak.
“We will also keep extending financial support for a rapid economic recovery,” the BOK chief said. Regarding the specifics of financial assistance, the bank elaborated this would include banks rolling over principal and interest payments for small business owners and the self-employed until the end of March.
Those groups were hit hardest by the pandemic as consumers were forced to stay at home and spent less on dining out.
It remains to be seen whether banks will roll over principal and interest payments for another six months or more, according to economists. Financial Services Commission (FSC) Chairman Eun Sung-soo held a meeting recently with the leaders of the nation's top financial holding firms and asked them to extend financial support for those hit hardest due to the protracted pandemic.