Choi, BOK chief exchange views

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Choi, BOK chief exchange views


Finance Minister Choi Kyung-hwan, right, poses with BOK Governor Lee Ju-yeol before his first meeting as economy chief at the Press Center in central Seoul yesterday. [NEWSIS]

With attention focused on when Korea’s central bank might cut the benchmark interest rate, Finance Minister Choi Kyung-hwan met yesterday with BOK Governor Lee Ju-yeol for the first time as economy chief at the Press Center in central Seoul.

But the two finance and monetary policy chiefs ended the hourlong meeting with no mention of the key rate, although they agreed on the seriousness of the current pace of economic growth.

“[We] didn’t even speak ‘geum’ of the ‘geumri’ [key rate in Korean] at the meeting,” Choi told reporters.

In response to media reports that Choi would push for a rate cut to stimulate the economy, the finance minister prepared for the meeting with the intention to demonstrate the government will not intervene in the central bank’s independent authority.

“Since determining the benchmark interest rate should fall under the authority of the central bank, it is right to let the central bank’s monetary policy committee make the judgment,” Choi said.

In the past, economic analysts have criticized the government for behind-the-scenes pressure on the central bank.

Former BOK Governor Kim Choong-soo was being pushed by the Park Geun-hye administration in its first year and former Finance Minister Hyun Oh-seok to lower the interest rate as part of the government’s economic stimulus campaign.

Kim was reluctant at first and held the key interest rate at 2.75 percent last April, when many experts had expected a reduction. The following month he lowered the key rate to 2.5 percent.

“The Ministry of Strategy and Finance and Bank of Korea are two pillars of the Korean economy,” Choi said. “The BOK has its own role.”

The two men shared the view that the economy faces increasing downward risks throughout the second half of the year, with the recovery slowing and domestic demand sluggish in the aftermath of the Sewol ferry tragedy.

Both expressed concerns about structural problems like imbalances between the export and domestic markets, and between corporate and household incomes.

“There was no difference in perspective about the economy with that of the minister,” Lee said. “We will discuss issues on the economy together and try to share views.”

The Finance Ministry and BOK promised to increase staff exchanges between the two organizations.

Choi entered the central bank in 1979 right after graduation before he passed the state examination for public servants.

Choi and Lee both graduated from Yonsei University.


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