Juyeol Lee: 70th anniversary of the Bank of Korea

Speech by Mr Juyeol Lee, Governor of the Bank of Korea, at the commemorating ceremony of the Bank of Korea's 70th anniversary, Seoul, 12 June 2020.

The views expressed in this speech are those of the speaker and not the view of the BIS.

First of all, we must faithfully fulfill our role as the central bank to surmount the crisis. Monetary policy should remain accommodative until the economy is expected to emerge from the coronavirus-triggered crisis and show a trend of recovery. To maintain financial market stability and smooth credit flows, the Bank of Korea should appropriately deploy policy tools apart from interest rates, if necessary. In addition, we need to closely cooperate with the government to ensure that policy effects are maximized.

While maintaining an accommodative monetary policy stance to overcome the crisis, we should not let our guard down against the possibility of financial imbalances building up over the medium- and long-term horizon. This is because we have seen recurring cases in which crises were caused by the accumulation of financial imbalances such as excessive credit expansions and asset price bubbles. While overcoming the current crisis with preemptive responses, we also should devise plans in advance to unwind these unprecedented measures once the crisis subsides.