Rhee says acting president‘s judicial appointments an ’inevitable economic decision‘
Bank of Korea Gov. Rhee Chang-yong on Thursday called acting President Choi Sang-mok's controversial appointment of two judges who will handle President Yoon Suk Yeol's impeachment trial "an inevitable decision for South Korea's economy," marking a rare political comment from the central bank head.
"While political views may differ, Choi's decision was necessary for the economy, not political motives, to prevent a decline in national creditworthiness and a leadership vacuum," Rhee said during his New Year's speech.
Rhee’s statement represents an endorsement of Choi’s decision, which triggered significant backlash from the ruling party amid heightened political tensions surrounding Yoon’s impeachment.
On Tuesday, acting President Choi appointed two Constitutional Court justices, Cho Han-chang and Jung Gye-seon — one from each side of the political spectrum — removing a key obstacle to the president’s impeachment trial.
While some members of the ruling party and Cabinet officials criticized the move as "unconstitutional," arguing it overstepped Choi's role as interim leader, Rhee emphasized that it was necessary to prevent further political instability.
"It will mark the beginning of signaling to both domestic and international communities that Korea's economic system will function independently of political influence," Rhee added.
Rhee went further, denouncing Choi's critics.
"Another impeachment, following those of the president and prime minister, would substantially undermine the Korean government's stability, damaging national credibility. ... Once a country's credit rating is downgraded, recovery is extremely difficult," he said, expressing frustration that Cabinet officials "must consider how their words impact international credit rating agencies."
This isn't the first time Rhee has openly expressed support for Choi.
After President Yoon's brief martial law declaration on Dec. 3, Choi offered to resign as finance minister, citing his responsibility in failing to prevent the crisis. Rhee reportedly persuaded him to stay, stressing Choi’s vital role as the "financial control tower." Reports also show that Rhee later defended Choi before opposition members, emphasizing his resistance to Yoon’s martial law declaration at a prior Cabinet meeting.
The close partnership and mutual trust between Korea's top financial policymakers underpin Rhee's bold actions. Since Choi’s appointment last month, the two have collaborated closely on economic policies, holding weekly meetings with financial regulators. Rhee’s September visit to the Finance Ministry in Sejong -- the first by a Bank of Korea governor -- further emphasized their unified approach to addressing the nation’s economic challenges.
While some argue Rhee’s support undermines political neutrality, others view it as unavoidable amid the prolonged political instability threatening Korea’s economy. The turmoil comes amid an economic slowdown and financial uncertainty, exacerbated by the National Assembly’s impeachment of Yoon followed less than two weeks later by the impeachment of Prime Minister and acting President Han Duck-soo. These events led to Choi’s appointment as interim leader, further emphasizing the need for stability in Asia’s fourth-largest economy.
Rhee's vocal support for the finance minister-turned-acting president may reflect his intent to reassure the global community. Addressing reporters Thursday, Rhee noted that "international concerns (regarding South Korea) have expanded beyond financial and forex market instability to include doubts about the recovery of national leadership," cautioning that deteriorating global sentiment could erode Korea’s credibility.
In his New Year's address, Rhee highlighted the unprecedented expansion of political and economic uncertainties, noting that "inflation, growth, exchange rates and household debt will face more complex policy trade-offs this year."
"I will closely monitor both domestic and external risks, as well as economic trends, to adjust the pace of rate cuts as needed," he added.
jwc@heraldcorp.com
