South Korea and Argentina CFOs share concerns over major economies’ exit from easing
South Korean Finance Minister Hong Nam-ki (right) shakes hands with Argentinian counterpart Martin Guzman ahead of talks in Venice, Italy, on the sidelines of the Group of 20 meeting of senior financial and economic officials . (Ministry of Economy and Finance)
The finance ministers of South Korea and Argentina shared their concerns about the normalization of the expansionary monetary policies of major economies, the Economy and Finance Ministry said on July 9.
In a pre-meeting of the Group of 20 of Senior Financial and Economic Officials held in Venice, Italy on July 9-10, Finance Minister Hong Nam-ki and his Argentinian counterpart Martin Guzman raised the possibility that withdrawing monetary easing measures, including raising interest rates, could trigger cross-border capital flows, increasing economic uncertainties in developing countries, officials said.
The remarks came as the US Federal Reserve took a hawkish stance on raising interest rates as its economy shows signs of recovery with its consumer price index rising 4.2% year-on-year. annual in April, marking the fastest growth in 13 years.
Bank of Korea Governor Lee Ju-yeol also hinted at a hike in key interest rates by the end of the year, saying that “if our economy is expected to experience a modest recovery, the bank Central will normalize the current easing of monetary policy in an orderly and timely manner ”in a statement on the occasion of the 71st anniversary of the founding of the BOK.
In response to possible rate hikes from major economies, key economic policymakers have agreed to voice their support for the International Monetary Fund’s capital flow management measures designed to limit capital flows and reduce financial risks arising from these flows.
At the same time, the two sides shared their views on efforts to strengthen economic cooperation.
“We welcome the resumption of negotiations on the Korea-Mercosur trade agreement, which have been suspended due to COVID-19 for more than a year,” said Hong, calling for a speedy agreement on the deal. free trade pending.
Asia’s fourth-largest economy reached an agreement in 2018 with the four member states of the South American Mercosur trade bloc – Brazil, Argentina, Paraguay and Uruguay – to launch trade negotiations.
“The Argentine government highly values South Korea’s experience in economic development. We hope to further strengthen bilateral cooperation in terms of trade and human exchanges, ”Argentina’s chief financial officer said.
By Choi Jae-hee ([email protected])