Outgoing Bank of Korea Gov. Rhee Chang-yong said Monday achieving economic stability and growth through monetary and fiscal policy alone has become increasingly difficult, calling for a broader role for the central bank in addressing long-term structural challenges.
Rhee made the remarks during his farewell ceremony in Seoul, as he completed his four-year term. Governor-designate Shin Hyun-song is set to begin his term Tuesday if his nomination is approved by the parliament later in the day.
"Despite the weakening influence of monetary and fiscal policy on achieving stability and growth amid structural changes in the economy, public expectations for policymakers remain high based on past successes, widening the gap between the two," Rhee said.
"Though recent economic and foreign exchange conditions have been relatively stable thanks to the semiconductor boom, it is difficult to view this entirely positively, as it also highlights deepening structural problems, such as excessive reliance on specific industries and resulting polarization," he added.
Stressing that structural reform is an ongoing process, Rhee urged the BOK to go "beyond the boundaries of monetary and financial policy to become the nation's leading think tank" by focusing on solutions to such structural issues as education, housing, balanced regional development, youth employment and elderly poverty.
Reflecting on his tenure, Rhee said the BOK played a key role in responding to unexpected shocks. He highlighted major achievements, including bringing inflation down to the 2 percent range ahead of other major central banks, introducing a Korea-style forward guidance, serving as chair of the Bank for International Settlements Committee on the Global Financial System and publishing more than 20 reports on structural reform.
"Public trust in a central bank ultimately depends on its competence," he said. "I hope you will not become complacent, but instead set higher goals and achieve even greater progress."
After stepping down, Rhee is expected to focus on activities utilizing his expertise and mentoring the next generation. (Yonhap)
