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| Bank of Korea Governor Lee Ju-yeol speaks during a press conference at the central bank in Seoul in this Aug. 30 file photo. / Yonhap |
By Park Jae-hyuk
The Bank of Korea (BOK) has begun to prepare for any contingent emergencies with Governor Lee Ju-yeol recently ordering several departments to prepare for a worst-case scenario amid growing uncertainties in the global and domestic economies, the central bank said Sunday.
The BOK chief also convened a meeting of 15 central bank executives on the last day of the Chuseok holiday to check on changes in the global financial market during the four-day holiday and how those changes will affect the domestic financial and foreign-exchange markets this week.
His actions are considered to indicate the BOK's pessimistic view on the nation's economy, which is in a stark contrast to its optimistic outlook during the first half.
According to the BOK, the governor ordered the monetary policy, international and financial markets departments to revise their contingency plan, considering all unfavorable factors, such as the U.S.-China trade war and Japan's export restrictions on Korean firms.
The departments, which work on trends related to the global financial market, have reportedly modified the contingency plan since late July.
After the revision, their reports are expected to include possible risks from global trade feuds and countermeasures to those.
Lee has paid more attention to risk management since the BOK made a surprising key rate cut in July, when most market analysts had expected the central bank to freeze the benchmark rate.
During a press conference Aug. 30, he even warned of a looming fear of recession, mentioning geopolitical risks including Brexit, populist policies in the Eurozone, financial crises in several emerging markets, and intensifying global protectionism.
The governor also hinted that BOK may conduct an additional key rate cut in October, saying, "We believe we still have some room to take action if necessary."
Amid the growing concerns, the BOK said it kept its eye on global financial markets during the Chuseok holiday.
"During the holiday, the reserve management group and overseas offices in New York, London, Frankfurt and Tokyo monitored international financial markets and indices related to Korea," a BOK official said.
"The governor also held a meeting Sunday to check on the global and domestic financial markets and economies during the holiday."
