Two of the nation’s top economic policymakers have agreed to work together to shape fiscal and monetary policies for managing economic risks.
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| Finance Minister Yoo Il-ho (left) greets Bank of Korea Gov. Lee Ju-yeol (Yonhap) |
Finance Minister Yoo Il-ho, who took office on Wednesday, met with Bank of Korea Gov. Lee Ju-yeol to discuss measures for bolstering Asia’s fourth-largest economy.
The two officials were quoted as saying they would pursue “harmonious fiscal and monetary policies” to overcome the multiple hurdles that the economy faces, including falling oil prices, a plunging Chinese stock market and recent North Korean nuclear tests.
The central bank is not under government supervision, but it keeps in sync with the state’s fiscal policies-especially in times of economic hardship.
One future bone of contention for the two institutions will be the timing of the BOK’s next rate move.
On Thursday, the central bank kept the base rate untouched at a record low of 1.5 percent. This is aimed to keep in line with the government‘s economic stimulus measures. The Finance Ministry, in the meantime, continues to have an expansionary fiscal approach to prop up the economy.
However, the central bank will have to decide on its future course of action as the U.S. is expected to further tighten its monetary policy after lifting the key interest rate for the first time in nine years in 2015.
Markets watchers believe the Federal Reserve may further raise rates this year on signs of a pickup in the world’s largest economy.
Both the central bank and the Finance Ministry has a similar economic growth target for the year. The former has a 3 percent forecast, while the ministry expects 3.1 percent growth.
