The Bank of Korea (BOK) named four new candidates for its board, as slowing economic growth and waning exports put a spotlight on monetary policy and increase pressure on the BOK to consider further cuts to borrowing costs.
The nominees are; Lee Il-houng, head of the Korea Institute for International Economic Policy, who was recommended by the BOK; Cho Dong-chul, chief economist for the state-run Korea Development Institute (KDI), who was recommended by the South Korean Ministry of Finance. Koh Seung-beom, standing commissioner of the South Korean Financial Services Commission (FSC), who was recommended by the FSC; and Shin In-seok, head of Korea Capital Market Institute, who was recommended by the Korea Chamber of Commerce and Industry.
The candidates — who are recommended by different organizations to serve four-year terms — need to be approved by South Korean President Park Geun-hye. They replace four policymakers, whose terms on a seven-member board end on April 20.
“Of the names that were mentioned today, only the stance of the KDI’s Cho is well-known in the market as a dovish person in favor of promoting growth,” said Park Jong-youn, a fixed-income analyst for NH Investment & Securities Co. “Still, with growth and inflation not satisfactory, the current administration is unlikely to appoint a hawkish member. I expect two rate cuts within the year.”
Speaking after the announcement, Cho said: “I will try my best to make the most appropriate decision under given conditions.”
The KDI, where Cho works, said in its economic report for this year, which was released late last year, that monetary policy should maintain an accommodative stance, as inflationary pressure is likely to remain weak. It also said that exports have become a hurdle to South Korea’s economic recovery.
Shin has called for more efforts on the internationalization of the won.
“Legal boundaries need to be eased to internationalize the won and efforts are needed to boost real demand” for the currency overseas, he said in July last year, according to Yonhap Infomax.
Lee said at a seminar earlier this year that South Korea’s traditional growth drivers, such as exports and the property market, are slowing, adding that household debt is a restraint to consumption.
The shift in board composition is one uncertain factor for the timing of a rate cut, as new members might need time to assess the economy. Among the members to leave are the hawkish Moon Woo-sik, and the dovish Ha Sung-keun, who called for the BOK to cut the policy interest rate by 25 basis points this month.
While both the central bank and government forecast South Korea to manage about 3 percent growth this year, economists are less optimistic, expecting 2.6 percent expansion, according to a Bloomberg survey.
South Korea’s exports are projected to fall for a 15th straight month this month amid a global slowdown, while inflation is expected to remain below the 2 percent target due to cheaper oil and weak domestic demand.
Zhang Yazhou was sitting in the passenger seat of her Tesla Model 3 when she said she heard her father’s panicked voice: The brakes do not work. Approaching a red light, her father swerved around two cars before plowing into a sport utility vehicle and a sedan, and crashing into a large concrete barrier. Stunned, Zhang gazed at the deflating airbag in front of her. She could never have imagined what was to come: Tesla Inc sued her for defamation for complaining publicly about the vehicles brakes — and won. A Chinese court ordered Zhang to pay more than US$23,000 in
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday held its first board of directors meeting in the US, at which it did not unveil any new US investments despite mounting tariff threats from US President Donald Trump. Trump has threatened to impose 100 percent tariffs on Taiwan-made chips, prompting market speculation that TSMC might consider boosting its chip capacity in the US or ramping up production of advanced chips such as those using a 2-nanometer technology process at its Arizona fabs ahead of schedule. Speculation also swirled that the chipmaker might consider building its own advanced packaging capacity in the US as part
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said that its investment plan in Arizona is going according to schedule, following a local media report claiming that the company is planning to break ground on its third wafer fab in the US in June. In a statement, TSMC said it does not comment on market speculation, but that its investments in Arizona are proceeding well. TSMC is investing more than US$65 billion in Arizona to build three advanced wafer fabs. The first one has started production using the 4-nanometer (nm) process, while the second one would start mass production using the
US President Donald Trump has threatened to impose up to 100 percent tariffs on Taiwan’s semiconductor exports to the US to encourage chip manufacturers to move their production facilities to the US, but experts are questioning his strategy, warning it could harm industries on both sides. “I’m very confused and surprised that the Trump administration would try and do this,” Bob O’Donnell, chief analyst and founder of TECHnalysis Research in California, said in an interview with the Central News Agency on Wednesday. “It seems to reflect the fact that they don’t understand how the semiconductor industry really works,” O’Donnell said. Economic sanctions would