New Year’s librarian predicts “continuation of rising prices”
▲ Lee Chang-yong, Governor of the Bank of Korea. Capture from the Bank of Korea website
Bank of Korea Governor Lee Chang-yong said that the focus of monetary policy for the new year is price stability.
In his New Year’s address on the 1st, Governor Lee said, “As prices, which are the most important factor in people’s lives, are expected to continue rising above the target level, this year’s monetary policy will continue to focus on price stability.” In addition, regarding the uncertainty of this year’s economy, he said, “Depending on the monetary policy stance of major countries such as the United States, volatility in the international financial market may increase, and international raw material prices may fluctuate sharply due to the war in Ukraine.” “Anxiety in the financial market may recur, and the impact of an interest rate hike will appear in earnest, increasing the possibility of a conflict between prices, the economy, and finance,” he predicted.
Governor Lee also mentioned the positive aspects of this ‘complex crisis’. “The won-dollar exchange rate soared to the mid-1,400 won range in the second half of last year, but the exchange rate gradually stabilized as a result of improvements in the risk management systems of the government, corporations and financial institutions. It was an opportunity to check the external soundness of our economy.”
Regarding the trade deficit, he said, “It was caused by the sharp rise in international raw material prices, and last year our exports reached a record high.” It will also improve quickly.” “In the process of reorganizing the global supply chain, excessive dependence on China must be reduced. A high interest rate environment can also be a starting point for lowering high levels of household debt and improving the debt structure,” he added.
Correspondent Shin Kang