Blue House rebuked officials for being "trapped in dogma"… FX policy chief ultimately replaced

Director-level appointments at the Ministry of Finance and Economy

Lee Hyung-ryeol named new Director-General for International Finance

Major reshuffle in the international finance line signaled

The Director-General for International Finance at the Ministry of Finance and Economy, who is responsible for stabilizing the exchange rate, was replaced on the 23rd. Lee Hyung-ryeol, former Policy Coordination Officer (director-general; 40th class of the civil service exam) who was appointed to a key director post on the policy line two months ago, was named the new Director-General for International Finance. With the high exchange rate in the KRW 1,400 range showing little sign of easing, some are assessing that the appointment reflects the Blue House’s intent that unconventional measures—rather than traditional approaches—are needed to stabilize the currency.

Lee began his public service career in the Financial Policy Division and went on to serve as head of the Foreign Exchange System Division and the Foreign Currency Funding Division, as well as head of the International Economic Affairs Coordination Division. Up through his time as a division chief, he was classified as part of the international finance line. After being promoted to director-general, he took on other portfolios, including Economic Supply Chain Planning Officer, International Tax Policy Officer, and Director-General for Policy Coordination.

Analysis that this signals a major reshuffle of the international finance line is gaining traction, given that he moved to the Director-General for International Finance post just two months after being appointed Director-General for Policy Coordination, one of the key positions on the policy line, in November last year.

Kim Yong-beom, the Blue House policy chief, is said to have rebuked the international finance line several times recently as the high exchange rate persisted, saying they were "trapped in dogma" (doctrinaire belief). Because Lee had not been considered among the next candidates for the Director-General for International Finance within the ministry, the move is being described as a surprise appointment.

A ministry official said, "There had been talk that the Blue House would replace much of the international finance line, but rather than bringing in a completely new figure, it appears they are trying to refresh the atmosphere by putting forward someone with international finance experience."

There is also an interpretation that the appointments were not aimed specifically at the international finance line. That is because the 40th and 41st classes of the civil service exam were placed across key director posts. Most officials previously mentioned as the next Director-General for International Finance were bureaucrats from the late 30th classes.

On the day, the ministry announced a set of director-level appointments, naming Kim Byung-cheol (40th class) as Director-General for Comprehensive Tax Policy; Kim Gu-nyeon (41st class) as Policy Planning Officer; Joo Hwan-wook (40th class) as Policy Coordination Officer; and Kim Geon-young (40th class) and Shin Sang-hoon (41st class) as Director-General for Property and Consumption Tax Policy and Director-General for Economic Structure Reform, respectively.

Another ministry official said, "With most of the Grade 1 positions filled by the 39th class, director-level posts were assigned to the 40th class," adding, "Senior directors will naturally step back to the second line." Appointments for the Director-General for Economic Policy, who is responsible for macroeconomic policy, are expected to be made after the Grade 1 reshuffle is completed.

Jung Young-hyo/Lee Gwang-sik, reporters hugh@hankyung.com