Bank of Korea faces uncertainties amidst board shuffle, warns ex-director

South Korea’s Central Bank, the Bank of Korea (BOK), is undergoing a shakeup in its policy board, raising concerns about future efforts to control inflation, warns a former policy director.

According to Bloomberg News, the impending departure of key members, Cho Yun-je and Suh Young Kyung, who played pivotal roles in the decision to raise interest rates in August 2021, is leaving the BOK with a leadership vacuum in the face of potential economic challenges.

This development adds an element of unpredictability to the BOK’s strategy in tamping down price pressure in case it resurfaces, given the departure of experienced figures who witnessed the adverse effects of aggressively eased policies.

Early inflation fighters bid farewell

The BOK’s board reorganisation is part of one of the most substantial overhauls in years.

Cho Yun-je and Suh Young Kyung, the only remaining members from the board that initiated the key interest rate hike in August 2021, are set to complete their four-year terms in April.

Hong Kyungsik, the recently retired director general of the monetary policy department, emphasises their crucial role, stating, “They were there to witness the adverse effects of aggressively eased policy.”