BOK Chief Warns Uncertainties Will Continue to Rise

The head of South Korea's central bank on Wednesday noted that financial and economic uncertainties remain high at home and abroad, and will likely rise for some time, demanding what he called cautious monetary and financial policies.

    Citing a recent newspaper report, the Bank of Korea (BOK) governor Lee Ju-yeol said the only thing central banks are certain of are high uncertainties. "Uncertainties at home and abroad are continuing to increase, and they may further expand following the outcome of the upcoming vote on a British exit from the European Union," Lee Ju-yeol said in a monthly breakfast meeting with leading economists here. 

    The South Korean top central banker also listed a US rate hike as another factor raising global uncertainties, noting the US Federal Reserve was well expected to increase its key interest rate before the year's end.

    On the domestic front, the BOK governor said corporate restructuring, currently under way in the most troubled shipbuilding and shipping sectors but expected to spread to other industries, will likely continue to undermine local conditions for some time, according to South Korea's (Yonhap) News Agency.

    Also noting the recent increase in the unemployment rate in the southeastern area, where most of the troubled shipbuilders are located, Lee said the fallout from the corporate restructuring will become more visible.

    An earlier report from the statistics office said the jobless rate in the southeastern South Gyeongnam Province came to 3.7% in May, gaining 1.2 percentage points from a year earlier and marking the fastest on-year increase throughout the nation.