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(ATTN: ADDS more remarks, apology for public concern from 5th para)

SEOUL, April 21 (Yonhap) -- 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 ongoing crisis in the Middle East.

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.

New Bank of Korea Gov. Shin Hyun-song arrives at the central bank in Seoul on April 21, 2026, a day after a parliamentary committee adopted a confirmation hearing report for Shin, clearing the way for his official appointment. (Yonhap)

While noting that the world is undergoing a period of "major transformation" driven by geopolitical tensions and the artificial intelligence (AI) revolution, Shin pointed to weakening growth momentum as key concerns amid demographic changes, deepening polarization and challenges in the real estate market and household debt.

"It has become increasingly difficult to fully identify and respond to risks in the financial system only using existing frameworks," he said. "We will reassess policy tools to help ease complex trade-offs among policy variables and to actively use 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. It marked the seventh consecutive on-hold decision, even as the central bank remains in an easing cycle.

Shin had earlier said 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."

Among other key priorities, the new governor cited the internationalization of the Korean won, including efforts to strengthen its global standing in the digital payments environment, as well as enhancing the use of central bank digital currency (CBDC) and deposit tokens.

Shin also expressed his intention to continue in-depth research and policy recommendations on structural reform, calling it a crucial part of monetary policy operations.

During a meeting with reporters, Shin again apologized for causing public concern over the course of his confirmation hearing process.

Shin has been embroiled in controversy over allegations related to his property holdings, his family's nationalities and other personal matters.

graceoh@yna.co.kr
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