BOK to focus on economic revival, financial stability

SEOUL, Jan. 16 (Yonhap) -- South Korea's top central banker reiterated his pledge
Friday that this year's monetary policy will focus on bolstering the sharply
slowing economy and stabilizing the financial market.

Amid a global crisis, Korea's economic growth is widely expected to dip into the
1-percent range this year on plunging exports. Since October, the Bank of Korea
(BOK) has cut its key interest rate by 2.75 percentage points to a record low of
2.5 percent.
"The economic growth rate is likely to fall sharply on ever-weakening domestic
demand and flagging exports," BOK Gov. Lee Seong-tae told a meeting with senior
BOK officials. "A credit crunch will continue due to lingering global financial
jitters and corporate restructuring."
After a rate-setting meeting in January, Lee hinted the bank may take further
action to keep the economy from sliding into a recession.
Asia's fourth-largest economy grew 0.5 percent in the third quarter of last year
from three months earlier, the weakest growth in four years. The economy is
estimated to have sharply contracted in the fourth quarter.
A top policymaker at the finance ministry said Thursday that South Korea may be
unable to meet the BOK's forecast of 2 percent economic growth this year. The
government is targeting 3 percent growth this year.
Lee also added the central bank will make efforts to supply liquidity to ease a
credit squeeze.
"To brace for a further contraction in lending, the BOK will take aggressive
measures to provide liquidity," Lee said.
Since the mid-September collapse of U.S. investment giant Lehman Brothers
Holdings Inc., the BOK has pumped more than 19 trillion won (US$13.8 billion) in
local currency liquidity into the financial system.
sooyeon@yna.co.kr
(END)