New BOK Chief Calls For 'Cautious, Flexible' Monetary Policy Amid West Asia Crisis

SEOUL, April 21 (Bernama-Yonhap) -- New Bank of Korea (BOK) Governor Shin Hyun-song on Tuesday vowed to pursue a prudent and cautious monetary policy amid heightened uncertainties stemming from the ongoing crisis in West Asia, Yonhap News Agency reported.

Shin made the remarks in his inauguration speech as he began his four-year term, succeeding outgoing Governor Rhee Chang-yong.

"Following the West Asia war, rising global oil prices have simultaneously increased upward pressure on inflation and downward pressure on economic growth, while heightened volatility in financial markets and the risk of accumulating financial imbalances continue to persist," Shin said.

"Given the uncertainty in inflation and growth paths, monetary policy should be conducted in a cautious and flexible manner to ensure stability in prices and financial markets," he added.

Shin also pledged to enhance the effectiveness of monetary policy by reassessing available policy tools to help ease complex trade-offs among policy variables and by actively using market-based price indicators "to strengthen early warning capabilities".

At its latest rate-setting meeting earlier this month, the BOK kept its benchmark interest rate unchanged at 2.5 per cent, taking a cautious stance as the war, which began in late February following US-Israeli strikes on Iran, has escalated into a broader regional crisis, rattling global markets and economies.

Shin had earlier said it was "too early" for the BOK to move decisively in one direction, describing the decision to hold rates as an exercise in "strategic patience.

-- BERNAMA-YONHAP