Bank of Korea deputy chief says monetary policy to be made 'very carefully'

SEOUL, August 21 - The new deputy chief of the Bank of Korea, Kwon Min-soo, emphasized on Friday that monetary policy decisions would be made "very carefully" and flexibly when needed. He took into account various factors, including the side effects of rate hikes, economic growth, inflation, financial stability, foreign exchange volatility, and geopolitical risks.

Speaking to reporters on his first day in office, Kwon stated, "It is time to make policy decisions very carefully, and flexibly if needed." Economic growth had been improving more strongly than anticipated, while inflation exceeded the bank's target, and financial stability risks remained. The Bank of Korea had raised interest rates for the first time in three and a half years, anticipating further hikes, in response to robust growth in South Korea's economy.

Kwon, who will also serve on the central bank's seven-member monetary policy board, said policy decisions would be primarily based on economic conditions and data. When asked about his stance, he declined to define himself as a hawk or a dove. As the won had strengthened significantly since last month, trading near 11-month highs on Friday, Kwon noted that the exchange rate would still be considered a policy variable due to external factors, although economic fundamentals indicated a further strengthening of the currency.