SEOUL (Reuters) -South Korea’s central bank chief said currency volatility will likely continue for some time amid uncertainties in the global economy and domestic politics, the Yonhap news agency reported on Tuesday.
“It is still too early to say whether the currency exchange rate has hit the bottom,” Bank of Korea Governor Rhee Chang-yong was quoted as saying, referring to the Korean won’s value against the U.S. dollar.
Rhee also said the BOK will likely have to cut the growth forecast and lower lending rates to boost the economy, according to the report.
He made the remarks during a meeting with reporters accompanying him to the annual meeting of the Asian Development Bank in Milan on Monday.
South Korea has been dealing with a leadership vacuum amid months of political turmoil which saw the Korean won weaken.
Rhee said it was a “difficult week” for South Korea, the report said, referring to the current political situation one month before the snap presidential election on June 3.
Former Prime Minister Han Duck-soo and former Finance Minister Choi Sang-mok resigned last week and Han entered the presidential race brought about by the ousting of former President Yoon Suk Yeol over his short-lived imposition of martial law in December.
“It was a difficult week as we had to provide an explanation on the current situation in South Korea, which is seen as a developed country from the outside,” Rhee said, according to the report.
“It is the responsibility of those remaining in their positions to make every possible effort in the ongoing trade negotiations with the U.S. for the sake of the national interest,” he added.
South Korean and U.S. officials held their first round of trade talks in Washington last month as Seoul pushes to cut a deal that could curb the impact of U.S. tariffs on vital sectors like the auto industry.
(Reporting by Hyunsu Yim; Editing by Chizu Nomiyama )
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