ID :
115040
Mon, 04/05/2010 - 15:14
Auther :

(3rd LD) Gov't, BOK agree to step up economic, monetary policy coordination


(ATTN: ADDS details and quotes about economy in last 5 paras)
By Koh Byung-joon and Kim Soo-yeon
SEOUL, April 5 (Yonhap) -- South Korea's government and its central bank agreed
Monday to step up coordination in pushing for economic and monetary policy
measures in a bid to stave off a recurrence of the recent economic crisis,
officials said.
The agreement was made in a meeting held earlier in the day between Finance
Minister Yoon Jeung-hyun and newly appointed Bank of Korea (BOK) Governor Kim
Choong-soo, according to a joint press release.
"The government and the BOK agreed to work closely together in sharing
information and holding working-level consultations on coordinating economic and
monetary policy measures as part of efforts to stave off a recurrence of the
crisis," said the press release, unveiled right after the two sides concluded
their first meeting since the new governor was inaugurated last week.
The meeting, also attended by high-ranking policymakers from both sides, has been
closely watched for possible glimpses into Kim's monetary policy direction. The
BOK is to gather for a rate-setting on Friday.
Under his predecessor Lee Seong-tae, whose four-year term ended in March, the
central bank was often at odds with the government over the timing of a rate
hike. The rate has been kept at a record low of 2 percent for 13 consecutive
months aimed at bolstering the sluggish economy.
The government has pushed for the rate to remain at its current low level for the
time being to accelerate an economic recovery, while the BOK has frequently
hinted at normalizing the low borrowing costs for fear of a possible asset
bubble.
The two, however, did not talk specifically about interest rate policy, said
officials who attended the gathering that lasted more than one hour.
Instead, they agreed that "domestic demand, exports and output continue to
improve" despite lingering uncertainties at home and abroad confronting the
nation's economy.
"The South Korean economy is likely to out perform the central bank's prediction
made late last year," Jang Byung-wha, a deputy central bank governor, told
reporters.
"Economic performance in February was better than expected. The first-quarter and
full-year economic growth numbers are expected to be higher than earlier
forecast."
The BOK forecast Asia's fourth-largest economy will expand 4.6 percent in 2010
with the government putting its growth estimate at around 5 percent. The central
bank plans to announce a revised economic forecast on April 12.
The South Korean economy has been on a recovery track, but some recent economic
data like jobless rates are raising concerns that the momentum might be slowing,
prompting policymakers to strike a cautious note about the pace of the recovery.
But the BOK said in late March that the growth of the South Korean economy is
widely expected to accelerate in the first quarter following weak growth of 0.2
percent in the fourth quarter, aided by improving consumer spending and exports,
dismissing views that the economy is losing steam.
kokobj@yna.co.kr
sooyeon@yna.co.kr
(END)

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