Bank of Korea Governor Shin Hyun-song attended his first Monetary Policy Board meeting on interest rate decisions with a relatively composed expression. The meeting's atmosphere was also notably more subdued than in the past.
A calm tension permeated the BOK's Monetary Policy Board meeting room on Wednesday. Starting with member Hwang Geon-il at around 8:57 a.m., Kim Jin-il, Yoo Sang-dae, Kim Jong-hwa, Lee Soo-hyung, and Jang Yong-sung entered the room one after another.
Kim Jin-il, who newly joined the board for this meeting, was seen looking around inside and outside the conference room. Attending his first Monetary Policy Board meeting, he drew attention as he greeted other members with a somewhat tense expression.
Shin entered the boardroom at exactly 9 a.m. He wore a conventional navy-toned tie rather than one in a striking color. After the photo session of striking the gavel, he gave a brief "thank you." When reporters asked, "Could you say a few words?" he simply replied, "Thank you for your work," and took his seat. The atmosphere differed somewhat from past governors, who had exchanged greetings with the press in a more relaxed manner.
The market has long had a practice of interpreting the governor's tie color as a kind of "signal" for the direction of interest rates. During the tenure of former Governor Kim Choong-soo, observations circulated that he wore blue or dark gray ties when holding the base rate steady, and red-toned ties when cutting rates. Former Governor Lee Ju-yeol was also said to wear green or blue-toned ties when deciding to hold rates, sending a stability signal to the market.
However, voices inside and outside the BOK suggest that Shin is relatively unfamiliar with this "tie culture." During former Governor Rhee Chang-yong's tenure, so-called "BOK goods" ties featuring Hangul patterns frequently appeared, rather than ties chosen by color. Not only the governor but also some senior officials wore them together, creating something of an organizational culture. But at Wednesday's meeting, aside from Deputy Governor Park Jong-woo and a few others, fewer senior officials than before were seen wearing such ties.
The market is leaning toward the possibility of another base rate freeze at this Monetary Policy Board meeting. In a Seoul Economic Daily survey of 20 economics and business professors and bond market experts, all respondents predicted a base rate freeze in May.
"Both inflation and growth are facing upward pressure, but the resilience of the economic recovery has not yet been sufficiently confirmed," said Han Jun-hee, senior research fellow at NH Financial Research Institute. "This time, the rate is likely to be held steady, but there is a possibility that the monetary policy direction statement will reflect the potential for additional rate hikes."
