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New BOK chief calls for 'cautious, flexible' monetary policy amid Middle East crisis

Published: 21 Apr. 2026, 13:20

Newly appointed Bank of Korea Governor Shin Hyun-song attends an inauguration ceremony held at the Bank of Korea annex in Jung District, central Seoul, on April 21. [JOINT PRESS CORPS]

New Bank of Korea (BOK) Gov. Shin Hyun-song on Tuesday vowed to pursue a prudent and cautious monetary policy amid heightened uncertainties stemming from the Iran war.

Shin made the remarks in his inauguration speech as he began his four-year term, succeeding outgoing Gov. Rhee Chang-yong.

"Following the Middle East war, rising global oil prices have simultaneously increased upward pressure on inflation and downward pressure on economic growth, while heightened volatility in financial markets and the risk of accumulating financial imbalances continue to persist," Shin said.

"Given the uncertainty in inflation and growth paths, monetary policy should be conducted in a cautious and flexible manner to ensure stability in prices and financial markets," he added.

Shin also pledged to enhance the effectiveness of monetary policy by reassessing available policy tools to help ease complex trade-offs among policy variables and by actively using market-based price indicators "to strengthen early warning capabilities."

At its latest rate-setting meeting earlier this month, the BOK kept its benchmark interest rate unchanged at 2.5 percent, taking a cautious stance as the war, which began in late February following U.S.-Israeli strikes on Iran, has escalated into a broader regional crisis, rattling global markets and economies.

Shin had earlier announced it was "too early" for the BOK to move decisively in one direction, describing the decision to hold rates as an exercise in "strategic patience."

Yonhap