WEBVTT - Bank of Korea Governor Rhee Chang-Yong Discusses Political Turmoil 

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<v Speaker 1>Well, and we know that the Bank of Career has

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<v Speaker 1>been trying to allay concerns, wanting to bring calm to

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<v Speaker 1>the market, and so far we're seeing some revisal and

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<v Speaker 1>the losses of the one Let's get perspective from the

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<v Speaker 1>Bokay governor. We have Governor Ri chang Yong joining us

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<v Speaker 1>from so governor, real good to have you with us.

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<v Speaker 1>I'm just wondering how you're assessing the fallout in the

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<v Speaker 1>market so far.

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<v Speaker 2>The Marshall law te CREB last night has been lifted

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<v Speaker 2>within a few hours, and the financial market is stabilizing quickly.

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<v Speaker 3>It's a relief that the impact of the market was

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<v Speaker 3>shortly lived. While it is still true that it's.

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<v Speaker 2>Hard to predict the political dynamics, but I believe that

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<v Speaker 2>the economic dynamics in Korea can be separated from the

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<v Speaker 2>political dynamics given our strong market fundaventors and also.

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<v Speaker 3>The mature democracy.

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<v Speaker 4>So do you think you've done enough so far? No?

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<v Speaker 2>What is you now is actually I'm very happy that

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<v Speaker 2>the impact has been short to live. Deepinically, we have

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<v Speaker 2>to see how these political events will evolve. In the meantime,

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<v Speaker 2>we focus on providing and pull liquidity to stabilize the market,

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<v Speaker 2>and when we look at the market, we do not

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<v Speaker 2>see any matafunctioning.

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<v Speaker 3>So but on the other hand, we by.

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<v Speaker 2>Expecting that, you know, in preparation for the future possible

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<v Speaker 2>UH financial unrest, we actually crengthened our liquidity UH injection

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<v Speaker 2>facilities such as.

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<v Speaker 5>UH the increasing our depot purchase of women and also

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<v Speaker 5>extending our UH illigible securities for open up your operation.

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<v Speaker 3>And so far, so far, so far it works well.

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<v Speaker 4>Yeah, so far, so good.

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<v Speaker 1>But in my conversation with a former trade minister of career,

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<v Speaker 1>he did talk about how he's expecting prolonged political uncertainties.

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<v Speaker 4>How prepared is it being okay for that?

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<v Speaker 3>Actually I watched your program.

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<v Speaker 2>Actually I think he was more concerned the other structural factors,

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<v Speaker 2>not only this problem the political issue.

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<v Speaker 3>But I think.

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<v Speaker 2>It's that yet decided. It's very hard to predict pitch options.

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<v Speaker 2>The political process really evolved. But I think you know

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<v Speaker 2>that the created government officers are well trained. We are

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<v Speaker 2>well experienced in handling the several difficulties. So I think

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<v Speaker 2>while in government in transition or in this transition period

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<v Speaker 2>which we believe a couple of months, I think we

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<v Speaker 2>have many tools and the talented government officers to handle

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<v Speaker 2>this macro constitution.

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<v Speaker 4>The tools include another rate cut.

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<v Speaker 1>You did a back to back rate cud in anticipation

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<v Speaker 1>of Trump's tariffs, which you say, well, weigh on the economy.

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<v Speaker 4>Might we see you cut rates even more?

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<v Speaker 3>Oh, you mean that because of this prolifical comment. I

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<v Speaker 3>don't think so, because.

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<v Speaker 2>As I mentioned this, this political event was very short

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<v Speaker 2>to live and I do not see any reason why

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<v Speaker 2>it has to change our economic outlook. At this moment,

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<v Speaker 2>we are focusing our gross rate years will be around

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<v Speaker 2>two point two percent and the next year it will

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<v Speaker 2>be around nine one point nine percent. But I think

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<v Speaker 2>we are still at this moment stick to our focus.

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<v Speaker 3>But I think I believe that our gross.

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<v Speaker 2>Focus will be more impacted by the structure of factors

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<v Speaker 2>such as a change in grow a valley chain and

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<v Speaker 2>also you know democraps, the facility rate and democraphy demography

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<v Speaker 2>in our continue. So these structure factors will be much

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<v Speaker 2>more important factors in the determining.

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<v Speaker 3>What our maintein potest will be and how we change our.

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<v Speaker 2>Focus, rather than this political event whichure short lived.

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<v Speaker 1>Yesterday, Governor, we know that you have regular meetings with

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<v Speaker 1>the Finance Ministry also with the financial Regulator.

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<v Speaker 4>That meeting now.

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<v Speaker 1>Becomes even more important given how the government is now

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<v Speaker 1>in this array. I'm just wondering, what's the significance of

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<v Speaker 1>those meetings now and what kind.

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<v Speaker 4>Of issues do you think will come forward.

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<v Speaker 2>I can be very proud that we call a four

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<v Speaker 2>meeting financial experts meeting.

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<v Speaker 3>I think that this is actually I have been.

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<v Speaker 2>Working for many other institutions in many other countries, but

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<v Speaker 2>I think the communication channel that we developed in the

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<v Speaker 2>last two years, so this among our full regulators and

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<v Speaker 2>Finance NEWSS and me we discuss every issue and we

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<v Speaker 2>are we actually own our independence, but we discuss finance

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<v Speaker 2>stability tis ever we should need to change our use.

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<v Speaker 2>And actually yesterday after this political event happens around one

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<v Speaker 2>thirty am eleven forty am, we gather together discuss what

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<v Speaker 2>we can do together, and then we also have another

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<v Speaker 2>meeting at.

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<v Speaker 3>Seven in the morning. Actould say I was top day

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<v Speaker 3>for me. I'm going to be.

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<v Speaker 2>Sleepy, but I think this corporation that can us is

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<v Speaker 2>means and work very well covering almost every account of issues.

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<v Speaker 4>Governor.

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<v Speaker 1>I'm just wondering with regards to the meetings that you

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<v Speaker 1>have with the policymakers in the Finance ministry for instance,

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<v Speaker 1>I mean, should the framework betweak perhaps to perhaps you know,

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<v Speaker 1>improve the leadership and uh you know the effectiveness of

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<v Speaker 1>those meetings given the situation of the government right now,

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<v Speaker 1>I think.

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<v Speaker 3>I like this.

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<v Speaker 2>So this informal platform because if it comes formal, you

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<v Speaker 2>need to prepare and there are a lot of bureaucracy

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<v Speaker 2>can be involved.

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<v Speaker 3>But even now intimacy.

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<v Speaker 2>And we can discuss many issues and by ordering our

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<v Speaker 2>independence and the separate role of the institution has to do,

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<v Speaker 2>we can do the perfect divisional label. For example, today

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<v Speaker 2>Career called on the spatial maintain postimmiliating. We focused on

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<v Speaker 2>the apeity injection today and the financial variety Services focused

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<v Speaker 2>on the measures how to civilize submarket. And then the

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<v Speaker 2>MUSU of Finance is coordinating many policies and they actually

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<v Speaker 2>uh work hard to to develop and you know, uh

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<v Speaker 2>monitor the EFTs market for example. This kind of division

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<v Speaker 2>of label was has been possible because we have discussed

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<v Speaker 2>this policy consistently, coherent, coherently accurse our institions.

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<v Speaker 1>You talked about how there is no need to really

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<v Speaker 1>look at your rate card trajectory. How confident are you

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<v Speaker 1>about the economy? Bearing in mind that we're seeing protests

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<v Speaker 1>in the streets. I mean tomorrow we're going to see

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<v Speaker 1>the current railway workers going to the streets as well

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<v Speaker 1>in protests. Might that not impact in that's a sentiment.

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<v Speaker 1>Might not that impact consumption? Might not that impact confidence

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<v Speaker 1>in the country and the economy.

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<v Speaker 2>I probably the factors you mentioned could have been a

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<v Speaker 2>very important factor if the President didn't accept the National

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<v Speaker 2>Assembly recommendation to lift the lift the martial law. But

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<v Speaker 2>given that the marshal law has been lifted, and now

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<v Speaker 2>I think if you look at the other side of

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<v Speaker 2>the coin, I think political certainty is actually increased, not decreased,

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<v Speaker 2>because in the last COPO of a year, I think

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<v Speaker 2>the tension between the ruling.

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<v Speaker 3>Party and o Ovisian Party make everything you dead lack.

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<v Speaker 3>But now I think this kind of some kind of

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<v Speaker 3>political can also help our projections.

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<v Speaker 2>Yes, as you mentioned, there may be some short term difficulties,

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<v Speaker 2>but I think if you can look at the other

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<v Speaker 2>side of coming there is also part of side. And

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<v Speaker 2>I think if you look at what happened yesterday, actually

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<v Speaker 2>I'm very I.

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<v Speaker 3>Think that you can see that the creacisions and.

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<v Speaker 2>Our politicians and our political systems are much more mature

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<v Speaker 2>and sane.

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<v Speaker 3>And I believe you mentioned the.

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<v Speaker 2>Label union's protests, but that kind of protest has been

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<v Speaker 2>around for the last ten years, and if President didn't

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<v Speaker 2>lift the march at all, that protest could have been

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<v Speaker 2>agglivated quite signicanty. But I don't think that. Yes, I

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<v Speaker 2>think regarding the st piachment effort, now there will be

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<v Speaker 2>some noise, but I.

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<v Speaker 6>Think that noise is not as as as we will

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<v Speaker 6>be a one not be very.

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<v Speaker 3>Large compared to the but we have been experiencing so far.

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<v Speaker 1>Governory, you're expressing optimism despite the political turmoil, then what

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<v Speaker 1>scenarios that would worry you?

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<v Speaker 3>Look, look, I do not mean that the embassy will

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<v Speaker 3>be smooth.

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<v Speaker 2>I think the last couple of months there will be

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<v Speaker 2>a lot of tensions among the political parties, and that

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<v Speaker 2>this is a political debate only as smooth as probably

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<v Speaker 2>wished for.

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<v Speaker 3>But what I mean is that, but.

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<v Speaker 2>Those kinds of things are within the realm of what

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<v Speaker 2>our government officers and experienced government officers and progressions can.

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<v Speaker 3>Handle using various tools that we have. And on the

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<v Speaker 3>other hand, what I'm worrying about is that it's more

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<v Speaker 3>likely there are a lot of grover uncertainties.

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<v Speaker 2>As you mentioned that the major countries you know, colge issues,

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<v Speaker 2>tarrif and also changing of Robert supply chain, and as

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<v Speaker 2>you mentioned that the geopolitics in Europe is also quite uncertain.

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<v Speaker 3>And what I'm.

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<v Speaker 6>Worrying about is if our own problem is, you know,

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<v Speaker 6>in substances amplify the global uncertainty, then maybe we may

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<v Speaker 6>have already you know, must difficult then I'm currently expecting.

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<v Speaker 2>But I think what we are doing is we have

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<v Speaker 2>to adapt whatever what has happened so at this moment,

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<v Speaker 2>whatever happened in politics, whatever happened in britical projections.

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<v Speaker 3>I think the government.

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<v Speaker 2>Offices like US and central bankers in Creer are ready

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<v Speaker 2>to react to you.

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<v Speaker 1>In verses, we talked to say we should race for volatility,

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<v Speaker 1>especially in the Korean one. We've seen it move, you know,

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<v Speaker 1>as low as one and a half percent is recovered somewhat.

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<v Speaker 1>Is there a red line in the sand for the

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<v Speaker 1>Korean one? I mean, at what stage will you be

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<v Speaker 1>defending that currency?

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<v Speaker 2>Ain we Preyer has been on the vext E change

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<v Speaker 2>regime for time, and you know.

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<v Speaker 3>We are not taleting for specific level of the exchanging.

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<v Speaker 2>But on the other hand, because Korean one is not

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<v Speaker 2>international vised, we are concerned on the productivity of our

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<v Speaker 2>exchange day and the pace.

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<v Speaker 3>Of the exchange way movement.

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<v Speaker 2>So technically, using the integrated polict framework, we are trying

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<v Speaker 2>to stibilize the.

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<v Speaker 3>Ever movement or exchangeway.

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<v Speaker 2>But at this moment, I think if you just look

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<v Speaker 2>at what happened yesterday with separ as I mentioned, the

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<v Speaker 2>Korean one t push facts sharply about six percent immediately.

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<v Speaker 2>But now I think we are slightly about the you know,

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<v Speaker 2>level that we had before the this is political event happens.

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<v Speaker 3>So I think in some.

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<v Speaker 7>Sense, using various tools including our agility injection you know

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<v Speaker 7>in the EFTs market too, I think that we are

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<v Speaker 7>now managing the situation better than.

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<v Speaker 3>You know, uh you are some other people. Then, as

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<v Speaker 3>as my.

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<v Speaker 2>Basic point is that if you look at what happened

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<v Speaker 2>now political arena, this tension happened because of the This

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<v Speaker 2>event has happened because of prolifical tensions.

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<v Speaker 3>Not any problem is coming from the munters. So in

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<v Speaker 3>that sense, I.

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<v Speaker 2>Think the impact it would be sure to leave and

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<v Speaker 2>we can focus on the economic strengths and the weakness

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<v Speaker 2>of CRE incoming rather than qualifica.

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<v Speaker 1>Side intact, Governor, For investors looking for some kind of

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<v Speaker 1>clarity on the situation in Korea, what can they expect

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<v Speaker 1>in the next twenty four to forty eight hours from

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<v Speaker 1>where you're seated, what can be expected?

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<v Speaker 3>I can ask what had changed?

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<v Speaker 2>Actually, I think during the night there was six hours

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<v Speaker 2>you know, uncertainty in signing country now bactive. So as

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<v Speaker 2>you mentioned, this may cause a more internal fight among

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<v Speaker 2>the politicians, and you can see those kind of fight.

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<v Speaker 3>I wouldn't mention country's name, but you can see many

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<v Speaker 3>other countries a similar polifical fight at this moment. And

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<v Speaker 3>then you know this kind of fight is.

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<v Speaker 2>Not affecting our fundamentals and change our STOMA operation. And actually,

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<v Speaker 2>if you look at today, our financial market functions very well.

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<v Speaker 3>The risk is there, but I think I'm not downplaying

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<v Speaker 3>the risks. There is a risk, but like an other countries,

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<v Speaker 3>but that risk is given. The nature of the risks

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<v Speaker 3>is within the you know, a range of range of

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<v Speaker 3>the what you can manage.

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<v Speaker 1>Governor, Thank you so much for your time. Governor Yichang

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<v Speaker 1>Yong joining us live from Seaul