New BOK chief takes office amid uncertain inflation, growth

Bank of Korea Gov. Shin Hyun-song, former head of the Monetary and Economic Department at the Bank for International Settlements, took office on Tuesday, signaling a new era for the central bank amid what he called a “time of great transformation.”

President Lee Jae Myung approved Shin’s appointment Monday, after the National Assembly's Strategy and Finance Committee endorsed the confirmation hearing report earlier that day. His four-year term will run until April 20, 2030.

"We have to ask what the role of the central bank is at a time of great transformation,” Shin said in a speech during an inaugural ceremony held at the bank’s headquarters in central Seoul.

"The supply shock stemming from the Middle East conflict has significantly heightened uncertainty over the paths of inflation and growth," he said, referring to pressures confronting Korea, a country heavily dependent on energy imports.

"We will continue efforts to enhance the effectiveness of monetary policy," he said.

Shin outlined four key priorities as he took the helm of the central bank: pursuing flexible monetary policy, strengthening financial stability, advancing digital finance innovation and the internationalization of the won, and reinforcing its role in supporting structural economic reforms.

Shin labeled the structural challenges as “key variables” in monetary policy, indicating he would continue the reform efforts pursued under former Gov. Rhee Chang-yong. During his term, Rhee stressed the need for broad-based changes across the economy, arguing that monetary policy alone can no longer fully address structural constraints.

"Structural factors are not a separate domain from monetary policy but an integral part of its operation, and we will continue to contribute to guiding the economy by providing in-depth research and policy recommendations on these areas,” Shin said, signaling a continued policy focus.

Shin also identified the internationalization of the Korean won as another key priority.

“In coordination with the government, we will pursue 24-hour operation of the forex market and establish an offshore won settlement system to improve the accessibility and stability of FX transactions in line with global standards,” he said.

Shin is a renowned macroeconomist, having held academic posts at Oxford University, the London School of Economics, and Princeton University. He has served as an adviser to the Bank of England, a senior resident scholar at the International Monetary Fund and an advisory member at the Federal Reserve Bank of New York. He had been with the BIS since 2014 before taking office.

Though Shin’s appointment had been delayed amid the National Assembly’s confirmation process, he was able to take office a day after Rhee stepped down, allowing the Bank of Korea to avoid a leadership vacuum.

"There is much work to be done, and I will be judged by how I carry out my duties as BOK governor," he said.