| Choo Kyung-ho, right, the nominee for deputy prime minister and minister of economy and finance, attends a meeting of the presidential transition committee at its office in Jongno District, Seoul, Monday. Joint Press Corps |
By Yi Whan-woo
Deputy Prime Minister and Minister of Economy and Finance nominee Choo Kyung-ho cited the need for key fiscal policymakers to maintain their right to join monetary policy meetings of the central bank and speak up with their opinions.
Choo's view comes amid the growing importance of coordination between fiscal and monetary policies, with the incoming Yoon Suk-yeol administration seeking to expand government spending and curb soaring inflation at the same time.
The vice finance minister and the Financial Services Commission (FSC) vice chairman have the right to attend Bank of Korea (BOK) monetary policy meetings if they find it necessary and share their thoughts on issues that require a policy mix.
But no fiscal policymakers have exercised such rights since February 2013.
“Such rights should not be discarded but should be kept for joint responses on the risks against the economy and financial market,” Choo said in a Q&A submitted to the National Assembly as part of the preparations for his Assembly hearing scheduled for May 2.
Concerning views that the aforementioned rights can be seen as overstepping the BOK's boundaries, Choo went on to say the rights should be used only under “emergency circumstances.”
However, whether the BOK will agree with Choo remains uncertain.
Prior to taking office on April 21, BOK Governor Rhee Chang-yong said during a parliamentary hearing that the rights are believed to be inefficient.
He said any failure to coordinate fiscal and monetary policies despite using the rights can only be “sending a signal that the finance ministry and the central bank remain out of sync.”
Against this backdrop, Choo said he will “frequently meet with BOK officials to enhance cooperation by exchanging ideas on economic policies.”