Bank of Korea chief, finance minister pledge closer policy coordination

South Korea's finance minister and the governor of the Bank of Korea agreed Monday to deepen communication between the country's fiscal and monetary authorities, as heightened financial-market volatility and external uncertainty push the two institutions toward closer coordination.

Finance Minister Lee Hyung-il, who also serves as deputy prime minister, visited the Bank of Korea on Monday morning and met with Gov. Shin Hyun-song. The visit came six days after Lee took office on Sept. 22, a pace the two sides attributed to their shared view that interagency communication and cooperation need to be reinforced.

The two policy chiefs agreed that economic indicators, including exports and investment, are holding up on the strength of the semiconductor sector, while external risks—among them interest-rate increases in major economies and geopolitical tensions—remain elevated and household strains persist.

As markets for financial assets, foreign exchange and real estate become more intertwined, the officials said they would look beyond headline macroeconomic data to identify risks early and respond preemptively.

Lee proposed closer communication on the shared goals of price stability, growth and financial stability; a stronger cooperative system for jointly monitoring and responding early to financial, foreign-exchange and asset markets; and joint work on longer-horizon issues such as internationalization of the won and digital finance, alongside measures to raise the economy's potential growth rate and spread the benefits of growth.

Shin responded that macroeconomic stability built on price and financial stability is a prerequisite for laying a sustainable growth foundation in a rapidly changing environment, and called for the two institutions to communicate and cooperate closely.

The officials agreed to continue communicating through existing channels, including regular financial-market review meetings.