SEOUL, March 2 (Korea Bizwire) – President Moon Jae-in is expected to announce the nominee for the next governor of the Bank of Korea (BOK) early next week, a presidential official said Friday.
Asked whether the presidential office will make the announcement next Monday, the official replied, “It is likely.”
BOK Gov. Lee Ju-yeol’s four-year term concludes at the end of this month and the new BOK head is facing challenges as the U.S. Federal Reserve and other central banks are likely to increase key rates at a faster pace than anticipated.
If the Fed raises its key rate in March, the interest rate gap between South Korea and the U.S. will be reversed.
Analysts said expectations of more hawkish U.S. monetary policy may put the BOK in a tight spot, as a higher key rate in the U.S. compared to South Korea could be a destabilizing factor for a national economy burdened with high household debt.
Although exports have shown strong signs of growth, South Korea’s economy is also grappling with a steady rise in household debt and protectionist moves around the globe.
South Korea’s household debt stood at 1,450.9 trillion won (US$1.34 trillion) at the end of last year, up 8.1 percent from a year earlier, according to BOK data.