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.
No drastic monetary policy shift expected under new BOK governor
President Moon Jae-in, right, shakes hands with Bank of Korea governor-nominee Rhee Chang-yong at Cheong Wa Dae in Seoul in this file photo taken in January 2019. Yonhap
By Lee Min-hyung
IMF Asia and Pacific director to lead Bank of Korea
By Lee Min-hyung
Bank of Korea governor-nominee Rhee Chang-yong
President Moon Jae-in nominated Rhee Chang-yong, director of the Asia and Pacific department at the International Monetary Fund (IMF), as the new governor of the Bank of Korea (BOK), the presidential office said Wednesday.
Rhee will replace outgoing BOK Governor Lee Ju-yeol, whose term ends on March 31. But a leadership vacuum at the central bank appears inevitable, since Rhee will be able to take office only after a National Assembly confirmation hearing.
The governor nominee had been frequently mentioned as the next BOK chief due to his broad range of experience at major international institutions. Rhee taught economics at Seoul National University and was vice chairman of the Financial Services Commission before becoming a senior economist at the Asian Development Bank.
He made headlines in February 2014 after being nominated to the ranking position at the IMF.
Rhee is widely expected to map out balanced monetary policies if he takes office as the next BOK leader, according to economists.
“Given his previous career at the international monetary organization, it is premature to say whether he will display a hawkish or dovish stance,” said Kim Jin-ill, professor of economics at Korea University. “It is hard for us to make predictions for the time being, so we need to wait and see.”
Korea Capital Market Institute research fellow Kang Hyun-ju expected the BOK to refrain from making drastic changes in its monetary policy even after Rhee becomes governor.
“He appears to have a balanced stance on economic growth and prices when taking into consideration his recent remarks and the IMF's macroeconomic roundup reports, which are in line with the BOK's forecast,” he said.
Even if further details will become available only after he takes office at the central bank, Rhee is not expected to revamp the BOK's current monetary strategy, according to the economist.
Rhee's career also includes a stint as a member of an economic committee on the transition team of former President Lee Myung-bak ahead of his inauguration back in 2007.
The BOK nominee, 62, studied economics at Seoul National University and received his doctorate at Harvard University and is widely known for his pragmatic perspective.
But a spokesperson for President-elect Yoon Suk-yeol expressed concerns shortly after the announcement by Cheong Wa Dae.
“Regarding the nomination of the new BOK governor, the presidential house did not hold any consultations with Yoon's presidential transition team,” the spokesperson said.
This contrasted with a briefing by the presidential office.
“We cannot share any further details over the nomination, but we decided to announce the nominee after receiving the opinion of the President-elect,” Park Soo-hyun, senior presidential secretary for public communication, said during a media briefing.
President Moon Jae-in's single, five-year term ends in May and the incumbent administration and Yoon's transition team have been waging a war of nerves over the nominations of key government officials.
Cheong Wa Dae argued that the nomination was made to avoid a possible leadership vacuum at the BOK.
The new governor is unlikely to start his new career at the central bank on Apr. 1, because it will take at least two weeks for Rhee to complete the National Assembly hearing. It took 16 days for the outgoing governor to take office after being nominated back in March 3, 2014.
But due to signs of an escalating conflict between the ruling and opposition parties over the nomination, chances are high that the legal procedure will be delayed further. For this reason, it remains unclear whether Rhee will be able to attend the next monetary board meeting slated for April 14.