New Bank of Korea deputy governor vows to focus on price stability and won internationalization

Kwon Min-su, the newly appointed deputy governor of the Bank of Korea, pledged Friday to focus on the central bank's core mandate of price and financial stability while leading efforts to internationalize the Korean won.

Speaking at his inauguration ceremony at the BOK annex, Kwon said growth is improving faster than expected on the back of strong semiconductor performance, but inflation remains above target and financial imbalance risks persist — particularly in household debt and housing prices. "Given exchange rate volatility and geopolitical and trade risks, this is a time that still calls for cautious and flexible policy judgment," he said.

He said the BOK would more faithfully fulfill its core roles of price and financial stability while carefully monitoring a soft landing in household debt. He added that the bank would strengthen its lender-of-last-resort function to ensure it operates properly in times of crisis, and would enhance analysis of insolvency risks in vulnerable sectors.

Kwon also identified strengthening the BOK's capacity to respond to financial and foreign exchange market conditions, and advancing won internationalization, as key priorities. Won internationalization refers to a vision of removing barriers that prevent foreigners from obtaining and using the won offshore, enabling foreign investors to conduct won-denominated settlements during each country's financial market hours without time-zone constraints.

In connection with this, the BOK has named its offshore won settlement system — set for launch in January — the "Bank of Korea Won International Settlement Network," or BOK International Network. A pilot run is planned for next month, with four major commercial banks — KB Kookmin, Woori, Hana and Shinhan Bank — set to participate. The BOK also plans to complete revisions to related regulations, including its payment and settlement system operating rules, by the end of this month.

The BOK International Network is infrastructure that would allow won to be traded as freely as dollars — much like Koreans can open dollar accounts at domestic banks and transfer dollars among themselves. The system is planned to operate around the clock on business days, excluding weekends and public holidays, from January. It is part of the government's broader won internationalization project. BOK Governor Shin Hyun-song also cited the initiative at his own inauguration in April, calling won internationalization "an important task of building monetary infrastructure befitting the status of our economy," and referencing plans for a 24-hour foreign exchange market and an offshore won settlement system.

Kwon also pledged to build on the BOK's success in securing inclusion in the World Government Bond Index by working toward inclusion in the MSCI developed-market index.

He said the BOK would support the stable establishment of a 24-hour foreign exchange market and would press ahead without disruption on the offshore won settlement system, central bank digital currency and payment and settlement infrastructure development. He also said the bank would overhaul its macroprudential framework to ensure financial stability is not undermined in the process of market opening and won internationalization.

To strengthen communication with markets and domestic and international counterparts, Kwon said he would ensure the BOK moves beyond simply participating in discussions at international organizations and central bank cooperative bodies, and instead takes the lead in raising agenda items and proposing solutions grounded in the challenges facing the Korean economy. Internally, he said the bank would innovate its working methods by making effective use of AI and would strengthen risk management in response to changes in the IT environment and workplace infrastructure.

Kwon is a Seoul native who graduated from Whimun High School and Yonsei University with a degree in business administration before joining the BOK in 1995. He later earned a master's degree in business administration from Yale University while in service. He is regarded as one of the BOK's foremost international experts, having served as head of the foreign exchange market team in the international department, head of planning at the foreign reserve management center, and director of the foreign reserve management center.

The BOK deputy governor is appointed by the president on the recommendation of the governor. Kwon's term runs three years from Friday through Aug. 20, 2029. The deputy governor also serves as an ex officio member of the Monetary Policy Board, and Kwon will join the board beginning with its policy rate decision meeting on Thursday.