SEOUL, KOREA - Bank of Korea governor Lee Ju-yeol said on September 16 that his bank would keep its eye on exchange rate fluctuations due to monetary policy change and interest rate spread between Korea and elsewhere. This is widely interpreted as a signal that the central bank may cut the benchmark rate again in order to keep the won-yen exchange rate from falling further.

 

He said this in an economic policy forum seminar held in the National Assembly, adding, "We must be vigilant about the possibility of the international financial market abruptly changing due to change in the monetary policy of industrialized economies."

 

As for the expansionary monetary policy of the European Central Bank and the Bank of Japan, he remarked, "This may cause the euro and the yen to depreciate. As the euro and yen depreciate, Korean exporters' price competitiveness in the world market may be eroded."

 

Earlier on the 12th in a press conference held immediately after the Monetary Policy Committee meeting, he also mentioned about the won-yen exchange rate, saying, "If the Japanese yen keeps weakening, it would have serious repercussions on the Korean economy."