South Korea president hints at 'quantitive easing' to spur growth

By Park Sae-jin Posted : April 26, 2016, 17:57 Updated : April 26, 2016, 17:57

[Yonhap News Photo]


South Korean President Park Geun-hye hinted Tuesday at a policy shift to opt for a fiscal stimulus package called "quantitative easing" to spur economic growth and domestic consumption.

"It's my position that we may also consider it positively. I will try to push it forward in such a way," Park told a meeting of chief editors of domestic newspapers and broadcasters.

Park's brief comment followed calls from her ruling Saenuri Party that South Korea should follow the footsteps of Japan and other countries which have tried to revive their economy by lowering the value of their currencies or through a fiscal stimulus package.

Some have suggested the central Bank of Korea should be allowed to inject liquidity into the market by purchasing bonds. 

There has been a debate in Seoul over whether to come up with its own version of quantitative easing to revitalize the economy.  South Korea has little leverage as Washington has put the foreign exchange policies of Seoul, Beijing, and Tokyo under close watch.

The central bank has kept interest rates unchanged for a tenth consecutive month in April, citing uncertain factors such as low oil prices and global market volatility.

BOK Governor Lee Ju-yeol has said the central bank's current monetary policy was already sufficiently supportive of the economy, ruling out more aggressive monetary easing.

Lee stressed that there is nothing much to do only with a rate cut at a time of lingering market uncertainties at home and abroad, calling for structure reforms together with fiscal and monetary policies to overcome difficulties.

Aju News Lim Chang-won = cwlim34@ajunews.com
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