Korean economy near growth potential: BOK head

By 박한나
  • Published : Mar 27, 2014 - 10:39
  • Updated : Mar 27, 2014 - 10:39
South Korea's economy has improved to near its long-term growth potential since being hit by the global financial crisis, the outgoing governor of the central bank said.

Gov. Kim Choong-soo said Wednesday in his farewell meeting with reporters that it is certain that the Korean economy has improved compared with four years earlier.

"The economy improved to near its growth potential," the governor said. "It is great luck for me to leave (the BOK) at a time when overall macroeconomic conditions have improved."

Lee Ju-yeol, a former senior deputy governor at the BOK, will replace Gov. Kim from April.

The Korean economy was hit hard by the global financial crisis, but recovered fast.

Under Kim's leadership, the BOK raised the key interest rate five times between July 2010 and June 2011 in a bid to normalize policy after emergency steps taken in 2008. The BOK froze the key rate at 2.5 percent for the 10th straight month in March.

Gov. Kim had his share of controversy during his four-year term as market players had complained about muddled policy signals.

The BOK's autonomy in managing the rate policy has often been put to the test under the leadership of outgoing Governor Kim, who was a key economic aide to former President Lee Myung-bak. He had said that the central bank is part of the government when he took office four years ago.

The governor has also made efforts to have his voice heard on the global stage and to beef up cooperation and exchanges of human resources with other central banks.

Also during his term, a law to empower the BOK to cope with financial instability was passed through parliament. The law allows the BOK to implement policies to stem financial systemic risks. (Yonhap)