Bank of Korea governor suggests IMF considers targeted loans and conditional forward-looking guidance

According to Kim Shi data, South Korea's People's Bank of China governor Lee Changyong suggested that the International Monetary Fund consider incorporating targeted loans and conditional forward-looking guidance into the policy framework when the effect of low-interest policy weakens. Lee Changyong pointed out that when structural factors such as aging population and low fertility rates make interest rates close to the effective lower limit, reducing borrowing costs alone may not be enough to stimulate the economy. The Bank of Korea is piloting conditional forward-looking guidance, and while releasing expectations for economic growth and inflation, it will release a Korean version of the dot chart reflecting the short-term interest rate views of board members. This move has improved policy transparency and market communication efficiency and provided new policy tools for the IMF.