Shin charts BoK's future: stability, digital won, global role
Hyun Song Shin, in his inaugural address as Governor of the Bank of Korea, outlined four key priorities for the central bank. He emphasized maintaining monetary and financial stability, advancing digital currency innovation, and addressing structural economic challenges.
Prudence amid global shifts
Governor Shin pledged to conduct monetary policy with prudence and flexibility to maintain price and financial stability, acknowledging increased uncertainty from Middle East conflict and rising oil prices.
He stressed enhancing policy effectiveness, reassessing instruments, and deepening communication with markets.
For financial stability, Shin called for a 'new lens,' recognizing blurring boundaries between banks and non-banks, and domestic and cross-border activities.
The Bank of Korea will strengthen early warning capabilities using market-based indicators and broaden analytical scope to include the expanding non-bank sector and off-balance-sheet transactions, aiming to reinforce the central bank's role in safeguarding stability.
Digital won and global integration
Governor Shin emphasized preserving trust in money and ensuring payment system integrity.
He detailed efforts to internationalize the Korean won through 24-hour foreign exchange market operations and offshore won settlement systems, aiming to enhance accessibility and resilience.
The Bank of Korea will also prepare for the future monetary system by expanding central bank digital currency (CBDC) and tokenized deposits via Project Hangang.
International cooperation, including Project Agorá, will strengthen the won's role in the digital payments environment.
These innovations will be supported by a macroprudential framework to safeguard financial stability.
Beyond traditional mandates
Shin's vision expands the Bank of Korea's mandate, integrating structural economic challenges directly into policy.
This proactive stance is crucial for Korea's complex domestic issues, demanding internal transformation and inter-agency cooperation.
Success hinges on the central bank's ability to innovate frameworks and foster integrated expertise.
Source: Hyun Song Shin: Inaugural address
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