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The Korea Herald
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THE INVESTOR
March 29, 2024

Finance

BOK head vows special attention to financial stability for 2017

  • PUBLISHED :January 01, 2017 - 10:56
  • UPDATED :January 01, 2017 - 10:56
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[THE INVESTOR] South Korea's central bank will pay close attention to financial stability next year as the country could be exposed to increased financial and foreign exchange volatility due to external factors, its head said Saturday.

"The Bank of Korea (BOK) will keep close tabs on financial stability in operating monetary policy in the new year," BOK Governor Lee Ju-yeol said in his New Year message.

"Because there's a possibility of expanded volatility in the financial and foreign exchange markets, price changes and in- and outflow of capital movements need to be closely monitored and active stability actions should be taken if necessary."


Bank of Korea Governor Lee Ju-yeol.



The U.S. Federal Reserve's normalization of monetary policies, meanwhile, could push up market interest rates here, increasing the burden of household debt repayment, he pointed out.

"The government and financial regulation authorities should cooperate closely to stabilize the sharp growth in household debt and keep down vulnerable social groups' default risks," he said.

As risk factors to the local economy, Lee cited growing trade protectionism in major countries and the incoming U.S. administration's policy, as well as Britain's decision to leave the European Union.

"If external risks actualize at the same time or combine with worsening local conditions, the effect could be unexpectedly severe," the governor said. "Keeping stability in the financial and foreign exchange markets and the real economy are the indisputably top priority tasks."

Taking such concerns into consideration, "It is appropriate to maintain an expansionary monetary policy stance for a considerable period of time going forward," the BOK chief stressed.

"(The BOK) will operate (policy) in a way that helps sustain the recovery of growth and achieve price stability over the mid-term ," he also noted.

(theinvestor@heraldcorp.com)

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