SEOUL (Reuters) – South Korea’s central bank governor said on Thursday that the pace of monetary policy easing this year would need to be flexible due to increased political and economic uncertainty.
“This year, conditions around our economy will be more difficult than ever before,” Bank of Korea Governor Rhee Chang-yong said in a New Year’s address.
“Monetary policy needs to be managed with flexibility and agility as political and economic uncertainty is unprecedentedly high,” Rhee said.
The pace of rate cuts will be flexible as trade-offs to growth, inflation, foreign exchange and household debt are expected to increase, Rhee added.
At its latest policy meeting in 2024, the BoK made its first consecutive rate cut since 2009, as policymakers grew wary of trade risks from the incoming US administration of President-elect Donald Trump.
Rhee said risks to the central bank’s 1.9% economic growth forecast for this year have risen, citing uncertainty over US trade policy and domestic politics.
As for the won, which has weakened more than 12% in 2024 and posted its worst year since 2008, Rhee said volatility could continue for a long time.
