Bank of Korea governor nominee says monetary policy tightening will continue

South Korea’s central bank governor nominee Rhee Chang-yong said on Tuesday the bank will continue to tighten monetary policy, while ensuring the recovery momentum is not hurt as downside risks to growth is increasing. In a speech prepared for a parliamentary hearing, Rhee said both inflation and growth risks must be closely examined for future monetary policy settings, citing increased uncertainties around the Ukraine crisis, US monetary policy, and Covid-19 resurgence in China. Rhee is expected to elaborate on his plans to lead the Bank of Korea’s monetary policy board at the hearing on Tuesday, as lawmakers will ask the former IMF official on the pace of monetary policy tightening over coming months, his economic expertise and ethical standards. The BOK last week raised its benchmark rate to 1.50 per cent, the highest since August 2019 in a surprise move as it ramped up the fight against rampant inflation, which is threatening its economic recovery. In the speech, Rhee said the BOK will need to continue signalling more policy tightening is on the cards to ease household debt growth as high level of credit pose risks to financial stability. Rhee, a veteran International Monetary Fund official, is expected to start his four-year term once formally appointed after the necessary parliamentary hearing. REUTERS