RHEE ATTENDS CONFIRMATION HEARING

[Anchor Lead]

The National Assembly has held a confirmation hearing for the Bank of Korea governor-nominee Rhee Chang-yong. He received a barrage of questions about how he's going to tame soaring prices. Lee vowed to curb inflation to help low-income earners.

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At his confirmation hearing, BOK governor-nominee Rhee Chang-yong stressed the importance of preemptive signs of interest rate spikes.

[Soundbite] Rhee Chang-yong(BOK Governor-Nominee) : "I am willing to risk my reputation to send the signals of interest rate hikes to stop consumer prices from rising further."

He says if interest rates are not raised promptly before inflation becomes too high, like in the U.S., low-income earners could be hit hard.

[Soundbite] Rhee Chang-yong(BOK Governor-Nominee) : "If we reach a situation when interest rates must be raised even more to stop inflation, the shock on the economy and socially vulnerable people could be tremendous."

The BOK governor-nominee also cited snowballing household debt as a reason for raising rates. However, Rhee insinuated he won't raise the key rate by 0.5 percentage points at a time. That's because inflation in South Korea is low compared to the 8-percent in the U.S. He also highlighted that the economic situation must be taken into consideration.

[Soundbite] Rhee Chang-yong(BOK Governor-Nominee) : "We should adjust the pace cautiously because our economic growth is not as strong as in the U.S."

The incoming central banker believes even if Korea decides to adjust its pace and the U.S. key rate becomes higher as a result, the nation should endure adverse effects stemming from that decision. Regarding concerns over the potential of the incoming administration's supplementary budget for helping small businesses putting upward pressure on consumer prices, Rhee said the Bank of Korea should intervene according to the size of the budget and funding plans. He also stressed a phased approach to easing regulations on real estate mortgages.

[Soundbite] Rhee Chang-yong(BOK Governor-Nominee) : "The LTV regulation should be eased first for first-time borrowers. All the other regulations should be adjusted according to the situation, as inflationary pressure is high now."

The National Assembly unanimously adopted a confirmation hearing report on the BOK governor-nominee.