March 5, 2018 / 6:58 AM / a year ago

South Korea's finance minister, BOK chief say will enhance policy coordination

South Korean Finance Minister Kim Dong-yeon speaks during his inaugural ceremony in Sejong government complex in Sejong, South Korea, June 15, 2017. Picture taken on June 15, 2017. REUTERS/Kim Hong-Ji

SEOUL (Reuters) - South Korea’s finance minister and central bank chief said on Monday they would enhance policy coordination amid heightened domestic and international economic uncertainties.

“South Korea’s economic recovery is on its way, but many uncertainties still exist with economic conditions abroad changing,” finance minister Kim Dong-yeon and Bank of Korea governor Lee Ju-yeol said in a joint statement released after the two held a meeting on Monday.

The statement also showed that they both expect foreign exchange volatility could increase as major central banks in the United States, EU and Japan normalize their monetary policies.

Federal Reserve Chairman Jerome Powell last week vowed to prevent the U.S. economy from overheating, prompting investors to increase bets on four rate increases for 2018.

The BOK kept interest rates unchanged at its last policy meeting and warned of the potential cost of U.S. protectionism on South Korea’s car and steel industries.

Monday’s statement said that Kim and Lee had agreed to stay alert and communicate with each other about the spread of trade protectionism following U.S. President Donald Trump’s move to impose bigger tariffs on steel and aluminum imports.

Reporting by Dahee Kim, Cynthia Kim; Editing by Sam Holmes

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