Bank of Korea chief sees more conflict between goals

© Reuters. FILE PHOTO: South Korea’s new central bank governor Rhee Chang-yong speaks during his inauguration ceremony in Seoul, South Korea April 21, 2022. SeongJoon Cho/Pool via REUTERS

SEOUL (Reuters) – The head of South Korea’s central bank said on Sunday it would likely face an increasing conflict between policy goals in 2023 as the effect of the recent aggressive policy tightening materialises in earnest.

“It will be a year when a sophisticated policy mix is more important than ever due to a growing possibility of conflict between inflation, economic growth and financial stability,” Governor Rhee Chang-yong said in his New Year’s address.

He said a fast cooling of the real estate market could cause financial market instability, while listing the war in Ukraine and the COVID-19 situation in China as the main sources of uncertainty facing the country’s economy and inflation.