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Reappointment responsibilities

Mar 05,2018
Lee Ju-yeol has become the third Bank of Korea Governor to be given a second term. His is the first such case since the BOK chief chaired the monetary policy board in 1998. His extension is exceptional as liberal President Moon Jae-in has replaced most of the figures named by his predecessor Park Geun-hye.

During his last four years on the job, Lee has extended currency swaps with multiple nations including China despite a serious diplomatic row that continues to play out. He also kept in sync with the government’s growth-accommodative stance.

Aside from Janet Yellen in the United States, who was replaced after her first term, governors of most major central banks traditionally serve for a long time. The person in charge of a country’s monetary policy has a prestigious and powerful position. In Korea, the BOK chief’s annual salary of 340 million won ($313,942) is bigger than the president’s 225 million won.

Since the Kim Dae-jung administration in 1998, all BOK chiefs served their four-year terms regardless of a shift in power from a liberal to conservative president or vice versa. The BOK has a new legacy now with Lee’s extension into a second term.

Lee has a hard four-year term ahead of him. Korea cannot stay idle while the United States raises its interest rates. He must navigate the economic waters well in order not to upset the economy through rate increases.

He must demonstrate exceptional expertise as a veteran policy maker. He must strengthen communication with the market to get its respect while maintaining integrity and dignity. The market must be able to understand the economy’s present and future performance through the words of the BOK chief.

He should be fully aware of the weakness of the BOK organization. He must strengthen research capabilities so that the government and market can rely on the central bank’s reports. We will watch with high expectations what precedents he will leave as the third reappointed BOK governor.

JoongAng Ilbo, March 3, Page 26