BOK governor plays down impact of political turmoil on economy

Bank of Korea Governor Rhee Chang-yong said that it is improbable for the central bank to cut interest rates, as he downplayed the impact of the political turmoil caused by the President’s unexpected decision to implement martial law on the economy.

This brief political event should not alter our current economic perspective, Rhee stated in a Bloomberg TV interview. Focus should be on the economy’s strengths and weaknesses rather than political ramifications, he added.

President Yoon Suk Yeol’s declaration of martial law was swiftly nullified by a parliamentary majority, causing turmoil in the financial markets. The won dropped against the dollar, shaking foreign investor confidence.

Six opposition parties have united to push for Yoon’s impeachment, adding to economic risks as Donald Trump plans tariff measures.

Rhee expressed confidence in the ability of well-trained government officials to handle the unfolding crisis, stating that they have many tools to manage the transition period in the coming months.

He emphasised the need to adapt to the current situation and expressed concerns about geopolitical tensions, global trade uncertainties, and other structural issues affecting the South Korean economy.

Attribution: Bloomberg

Subediting: M. S. Salama