South Korea picks IMF official as new central bank chief | Business and Economy

Nominee is extensively anticipated to proceed nation’s efforts to curb inflation with aggressive rate of interest hikes.

South Korea nominated on Wednesday veteran Worldwide Financial Fund official Rhee Chang-yong as its new central financial institution chief, a choose extensively anticipated to proceed the financial institution’s efforts to curb inflation with aggressive rate of interest hikes.

Rhee, presently the director of the Asia and Pacific Division on the IMF, will be a part of the Financial institution of Korea as Asia’s fourth-largest economic system battles surging costs, pushed by provide chain snags and the Ukraine warfare.

He succeeds Governor Lee Ju-yeol, whose time period ends March 31 after eight years helming the financial institution.

Economists say whereas Rhee is prone to be much less hawkish than Lee, affecting the make-up of the financial institution’s seven-member board, he’s not anticipated to considerably alter the BOK’s present coverage posture.

“Taking a look at his previous feedback and stories, he’s extra of a dove, though he received’t reveal such a stance given present financial local weather,” mentioned Kyobo Securities economist Paik Yoon-min. “However I do assume that the BOK’s board would possibly find yourself with extra dovish color.”

The BOK subsequent opinions its coverage charge on April 14 and analysts count on the board to take the bottom charge to 1.75 % by end-2022 from 1.25 % presently.

Kong Dong-rak at Daishin Securities additionally mentioned Rhee could be much less of a hawk than Governor Lee, though “he received’t blatantly make that clear till after a couple of hikes”.

The BOK has raised rates of interest thrice since August to dampen inflationary pressures and a build-up of economic imbalances, making it one of many world’s extra hawkish central banks.

The financial institution now says much more aggressive charge hikes could also be wanted amid rising import prices and ongoing provide chain hiccups.

Political transition

The change in financial institution governor comes amid a wider political transition within the nation with conservative President-elect Yoon Suk-yeol set to take workplace in Could, changing outgoing chief Moon Jae-in.

Moon’s workplace mentioned on Monday the president had mentioned the nomination with Yoon, though Yoon’s transition committee launched a separate assertion saying the nomination had not been addressed in conversations.

Earlier than commencing his four-year time period, Rhee will probably be topic to questions from lawmakers about his financial experience and moral requirements.

Members of the Nationwide Meeting usually grill these tapped as high officers in parliamentary hearings, though Rhee’s nomination doesn’t formally require legislative approval.

Such hearings up to now have centered on a variety of non-public issues, together with nominees’ property transactions, tax histories and even the navy service of relations.

As a director on the IMF, Rhee presently oversees its lending operations and surveillance work throughout Asia-Pacific.

Earlier than becoming a member of the IMF in 2014, Rhee served as chief economist on the Asian Improvement Financial institution and a Sherpa for the nation’s G-20 Presidential Committee when South Korea hosted the group’s summit in 2010.

He has labored intently with finance ministry officers, together with former vice finance minister Choi Sang-mok who’s now part of President-elect Yoon’s transition committee.

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