The presidential office said that Lee Ju-yeol, who had worked for the BOK since 1977 and retired as deputy chief in 2012, was chosen to succeed Kim Choong-soo as BOK governor.
Kim’s four-year term expires at the end of March. Kim has been regarded as a close confidant of former President Lee Myung-bak.
Nominee Lee is “more versed than anybody else in BOK business” and has a good sense of judgment as well as knowledge and acumen about the international financial market, said presidential spokesman Min Kyung-wook.
“He is also trusted by many in the BOK due to his reasonable and humble personality,” he said.
Lee’s nomination is subject to a parliamentary confirmation hearing. The leadership change at the BOK comes at a time when South Korea’s economy is showing signs of recovery.
How to reconcile calls for a softer monetary policy to prop up the fledging recovery of Asia’s fourth-largest economy and the BOK’s central role of keeping inflation in check is expected to be one of the main challenges facing the new governor, analysts say.
Under the outgoing governor, the BOK raised the key interest rate five times between July 2010 and June 2011 in a bid to normalize emergency steps taken during the 2008 global financial crisis.
The central bank then lowered the borrowing costs in three steps between July 2012 and May 2013 to prop up the local economy as the eurozone debt crisis clouded the global economy. The BOK froze the key interest rate at 2.5 percent for the eighth straight month in January as the local economy is recovering amid tame inflation.
The Korean economy is on the recovery track on the back of improving exports and domestic demand. Asia’s fourth-largest economy is likely to grow 3.8 percent this year, better than a 2.8 percent on-year gain recorded for last year, according to the BOK.
The BOK was originally established with a capital of 1.5 billion won, all of which was subscribed by the government, but the amendment of the Bank of Korea Act in 1962 made the bank a special juridical person having no capital.
The primary purpose of the bank, as prescribed by the Act, is the pursuit of price stability. The Bank sets a price stability target in consultation with the government and draws up and publishes an operational plan including it for monetary policy.
By Oh Kyu-wook and news reports