SEOUL, KOREA - Kim Choong-soo Bank of Korea governor said the responsibility for stimulating the economy is now squarely on the government, not on the central bank. He said this on May 3 at New Delhi to attend an Asian Development Bank meeting there.

 

"The reason I stressed 'policy mix' strongly in many occasions earlier was because I wanted to say to the government 'it's your turn now'," he added. Given the Bank of Korea created a monetary foundation last year by cutting 0.25 percentage point twice in July and October, he implied, it is the government's turn to do something with fiscal measures.

 

Governor Kim also said, "The 0.5-percentage-point cut last year was by a large margin. The Korean won is not even a key currency like the dollar or the Japanese yen. Then where do you want us to go It's like saying we must engage in a race to the bottom as firms and borrowers want ever lower interest rates. But there is no country in history to come back to normal by pursuing that path."