South Korean Central Bank Governor Warns Of Risks From Continued Rate Cuts

According to Odaily, South Korean Central Bank Governor Lee Chang-yong expressed concerns on Thursday that ongoing interest rate cuts could become a source of anxiety. He pledged to closely monitor risk factors to determine the pace of the central bank's monetary policy. The Bank of Korea is set to hold a rate decision meeting this month, amid the country's most severe political turmoil in decades. This political instability has led to the South Korean won falling to its lowest level since 2009 and has put pressure on the stock market. Last Sunday, a Jeju Air plane crash resulted in the deaths of all but two of the 181 people on board, potentially further impacting consumer confidence. In his New Year's address, Lee stated, "In the current situation, it is difficult to stabilize the economy through monetary policy alone." He also warned that the ongoing leadership vacuum could exert pressure on the market. As U.S. President-elect Trump prepares to return to the White House, the South Korean central bank unexpectedly cut rates consecutively in the fourth quarter of last year to support the economy against trade headwinds.