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South Korea’s president has nominated Shin Hyun-song as the nation’s next central bank governor, turning to an experienced economist best known for his early warnings about excessive leverage ahead of the 2008 crisis.
Shin, 66, is one of South Korea’s most internationally recognised economists after spending the past 12 years as the top economic adviser at the Bank for International Settlements, which acts as a forum for the world’s central banks.
His career also includes professorships at Princeton and the London School of Economics, as well as a stint as international economic adviser to former Korean president Lee Myung-bak.
“In a situation where uncertainty in the global economy has increased due to the Middle East crisis, [Shin] is the right person to simultaneously achieve the monetary policy goals of price stability and national economic growth,” said Lee Kyu-yeon of South Korea’s presidential office. He also described Shin as “an expert who lacks nothing” in terms of qualification for the job.
Shin will face a parliamentary confirmation hearing to become governor of the Bank of Korea within the next three weeks. The National Assembly lacks veto power, making it all but certain he will take up the four-year post when predecessor Rhee Chang-yong’s term ends next month.
Shin faces a formidable challenge from the outset. The Korean won recently weakened to around 1,500 per dollar, nearing levels last seen during the 2008 global financial crisis.
The broader economy faces a ‘K-shaped’ divergence in which headline growth driven by AI-related demand for memory chips masks sluggishness among other industries such as petrochemicals, batteries and steel. The country is also highly dependent on oil from the Middle East, meaning a prolonged Iran war could be costly.
Shin last week said that if the Iran war was a temporary supply shock “these are the textbook examples where you should look through and not react with monetary policy”. However, he added that this would depend on how long the conflict lasted and how long the pressure on prices was sustained.
Korea suffers from high property prices in the capital region and one of the highest levels of household debt in the developed world. Shin’s public commentary over the years has returned consistently to the theme of deleveraging, suggesting President Lee’s choice is “at least partly aimed at tackling this”, said one official in Seoul.
Shin has argued that central banks should act pre-emptively when inflation expectations begin to drift, warning that failing to do so would require much more forceful tightening later.
This points to a potentially cautious stance on rate cuts, though Shin today said he would take a “balanced” approach to growth and inflation.
The BoK’s base rate has been on hold at 2.5 per cent since May 2025, with the central bank indicating this is likely to continue until at least August this year.
Shin is known for his scepticism over stablecoins. He has said they could accelerate capital outflows and undermine monetary stability. They are “much like private banknotes circulating in the 19th century Free Banking era in the United States. As such, stablecoins often trade at varying exchange rates, undermining singleness”, he wrote in a BIS report last year.
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