Two doves and one hawk are replaced on monetary policy board

The Bank of Korea’s monetary policy board - which sets the country’s interest rates - has three new members, while the term of one sitting member was extended, it was announced Thursday.

On April 20, the terms of four of the seven board members expire.

Cho Yoon-je, former ambassador to the United States, was recommended by the Ministry of Finance. He served as ambassador between 2017 and 2019 under the Moon Jae-in administration.

The 68-year-old is currently an honorary professor at Sogang University.

Joo Sang-yong, an economics professor at Konkuk University, was recommended by the Financial Services Commission, and Suh Young-kyung, head of the Sustainable Growth Initiative under the Korea Chamber of Commerce and Industry (KCCI), were nominated by the KCCI.

Suh worked at the central bank for more than 20 years.

The term or Koh Seung-beom, who has served on the policy-setting board since 2016, was extended on recommendation of the central bank. This is the first such extension since 1998, when board positions became full-time jobs.

The three new members replace Cho Dong-chul, Shin In-seok and Lee Il-houng.

Cho and Shin were known for dovish policies and have favored monetary easing, while Lee was known as one of the board’s most hawkish members and favored higher interest rates.

Cho Yoon-je has commented positively on President Moon’s income-led growth policy and has close ties to the president, advising him on economics during the presidential campaign.

For a time, Cho Yoon-je was considered a candidate for the central bank governorship.

The bank explained that Koh’s term extension was to ensure a continuity of policy.

“In a time like this with Covid-19, the board’s monetary policies play a more important role than ever, and it was considered vital to secure continuity,” the bank explained.

Among the new members, Cho and Suh’s tenures will expire in 2024 and Koh and Joo’s tenures will expire in 2023 as the bank tries to avoid more than half of the board members being replaced at the same time.

Their terms will begin on April 21, and the board’s first policy meeting will be held on May 28.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]