Bank of Korea chief Lee Ju-yeol chairs rate-setting meeting[Photo by Namgung-jinwoong = timeid@]
South Korea's central bank chief said Wednesday the country’s economy is recovering at a slower pace than earlier thought and may miss its growth forecast of three per cent for this year.
Bank of Korea Governor Lee Ju-yeol said there is an underlying weakness in the economy at present from weak exports and slowing consumption.
South Korea cannot escape low growth and low inflation with its monetary policy alone, he said, adding structural reform and increased competitiveness should also play a role in boosting economic growth
"Just because our monetary policy seems less accommodative than other countries on the surface does not mean that it is restraining growth," Lee said.
The central bank again kept interest rates on hold this month at a record low 1.5 percent, but analysts say it is likely to cut rates in April or sometime later in the year.
The bank will announce its revised economic forecasts on April 19.
On Monday, it announced new candidates to replace four of its seven monetary policy board members, signaling a greater say by the government in future monetary policy.
The newcomers include Cho Dong-chul, a professor and chief economist from the state-run think tank Korea Development Institute, Lee Il-houng, president of the state-funded Korea Institute for International Economic Policy, Koh Seung-beom, a standing commissioner of the financial watchdog Financial Services Commission, and Shin In-seok, head of the Korea Capital Market Institute, which is frequently involved in state-funded research work.
The nominees will replace four central bank policy makers who retire after their four-year terms on April 20.
The government in the past typically preferred easier monetary policy, especially when it was in a fiscal expansion to spur anemic growth while the central bank usually hesitated to comply for fear of stoking inflation.
By Alex Lee
reporter
Park Sae-jin
swatchsjp@ajunews.com
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