SEOUL, Jan. 15 (Korea Bizwire) -South Korea’s finance minister and the central bank chief agreed Friday to strengthen cooperation in managing economic and monetary policies in a bid to tide over current challenges at home and abroad.
At their first meeting since Finance Minister Yoo Il-ho took office on Wednesday, Yoo and Bank of Korea (BOK) Gov. Lee Ju-yeol shared the view that the South Korean economy is at a critical juncture in the face of falling oil prices, a Chinese rout and the recent North Korean nuclear tests, as well as a demographic change, according to a ministry official.
“I went to a seaport in the morning to see a cargo ship loaded with vehicles for export. They are busy and doing pretty well,” said Yoo, trying to break the ice. “But when we see the numbers, I’m worried that our outbound shipments fell 7.2 percent last year.”
The government and the central bank will cooperate in managing internal and external risks and work together to engineer an economic takeoff through harmonious fiscal and monetary policies.
The United States is widely expected to raise its interest rates further in the near future.
The BOK, which has kept the base rate at a record low of 1.5 percent in line with the government’s economic stimulus, will consider following the U.S. move, while Yoo will keep taking an expansionary approach to prop up the economy.
The central bank froze the rate at 1.5 percent at its rate-setting meeting on Thursday, citing rising uncertainties in China and commodity prices.
But the BOK also revised down the growth forecast for 2016 to 3.0 percent, slightly lower than the finance ministry’s 3.1 percent target, which Yoo has been confident in achieving.