(LEAD) Vice finance minister to attend BOK rate-setting meetings this year

(ATTN: RECASTS lead; ADDS comments, more info from 5th para)
SEOUL, Jan. 7 (Yonhap) -- South Korea's vice finance minister will regularly
attend the rate-setting committee of the central bank starting this year in order
to voice the government's opinion on the overall monetary policy direction,
government officials said Thursday.

Vice Finance Minister Hur Kyung-wook will take part in the first such meeting of
the seven-member Monetary Policy Committee this year held by the Bank of Korea on
Friday, the Ministry of Strategy and Finance said in a statement.
Attendance at the monthly rate-setting meeting by finance ministry policymakers
is unusual as the government has sought to guarantee the independence of the
nation's central bank in its monetary policy direction.
The move, however, is aimed at allowing the government to weigh in on monetary
policy decisions, according to the ministry.
"We have attended the meeting in exceptional cases in order to respect the
central bank's independence but the economic crisis raised the importance of
policy coordination between the government and the central bank," the ministry
said.
"From 2010, the government will attend the meeting regularly in a bid to
intensify policy coordination with the central bank and use the chance as a way
to exchange opinions among policymakers and share consensus on economic
conditions," it added.
Under existing laws governing the operation of the central bank, the vice finance
minister or vice chairman of the Financial Services Commission is allowed to
attend the meeting to relay the government's stance on specific policy issues.
But it has been rare for the government to take part in the meeting. Friday's
attendance by the vice finance minister marks just the fifth such, with the most
recent case prior to Friday having taken place in June 1999.
Analysts say that the move comes as the government and the central bank have been
at odds with each other over the direction of the nation's monetary policy in the
face of the worst global economic crisis in decades.
The government has pushed for an expansionary macroeconomic policy to prop up the
sluggish economy, and the BOK also joined the move by slashing key interest rates
to a record 2 percent and keeping it there for a 10th straight month.
With the economy showing signs of rebound, however, debate is growing over when
and how the nation should roll back such emergency measures taken to cushion the
shocks from the global economic turbulence.
The finance ministry has tended to focus more on bolstering the economy while the
central bank has made taming inflation its top priority.
kokobj@yna.co.kr
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