Lee Chang-yong "Seriously aware that a high exchange rate can raise the cost of living"

Lee Chang-yong, Governor of the Bank of Korea, said on the 17th that he would take note that a high exchange rate could raise consumer prices. He said, "I am taking the situation seriously," and "I will monitor it closely with vigilance."

At a briefing on the price-stability target at the Bank of Korea headquarters on Namdaemun-ro in Seoul that day, he said this. He noted, "Recent inflation has risen to the mid-2% range, raising many concerns," and explained the upward factors as "the continued rise in agricultural, livestock and fishery product prices due to adverse weather, and the rise in the exchange rate has sustained strength in petroleum product prices."

He repeatedly expressed vigilance about the exchange rate. The won·dollar exchange rate exceeded 1482 won per dollar intraday that day. A high exchange rate in the 1,400 won range has continued since the end of last September. Recently it has been hovering around 1470 won.

He said, "It is difficult to rule out that the higher exchange rate could be passed through to the prices of various items," adding that the situation cannot be viewed with assurance going forward. He said, "Next year's inflation rate is expected to be 2.1%, the same as this year," but emphasized that "if the exchange rate remains at the current high level, prices could rise, so attention is needed."

He also remarked that those hit by a high exchange rate would be the general public. He said, "I am seriously aware that if the cost of living, which was high after the pandemic, rises further, the burden on the public could increase," and said, "I will monitor future developments closely with vigilance."

Kang Jin-gyu reporter josep@hankyung.com