Bank of Korea
Bank of Korea Headquarters
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| Headquarters | Jung-gu, Seoul, South Korea |
|---|---|
| Coordinates | 37°33′43″N 126°58′50″E / 37.562°N 126.980661°E |
| Established | June 12, 1950 |
| Governor | Lee Ju-yeol |
| Central bank of | South Korea |
| Currency |
South Korean won KRW (ISO 4217) |
| Bank rate | 1.25% |
| Website | http://eng.bok.or.kr |
| Bank of Korea | |
| Hangul | |
|---|---|
| Hanja | |
| Revised Romanization | Hanguk Eunhaeng |
| McCune–Reischauer | Han'guk Ŭnhaeng |
The Bank of Korea (BOK; Hangul: 한국은행) is the central bank of the Republic of Korea and issuer of South Korean won. It was established on June 12, 1950 in Seoul, South Korea.
The Bank's primary purpose is price stability. For that, the Bank targets inflation. The 2016–18 target is consumer price inflation of 2.0%.
The Bank of Korea was established on June 12, 1950 under the Bank of Korea Act.
Following liberation on August 15, 1945, the Korean economy was plunged into turmoil. Tackling the severe inflation and financial disorder brought about by an acute shortage of resources and the division of the country along the 38th parallel was the immediate priority.
In this situation, discussions raged across the country on establishing a central bank for the Republic of Korea and Dr. A. I. Bloomfield, dispatched from the Federal Reserve Bank of New York, drafted the Bank of Korea Act.
Based on this draft, the Bank of Korea Act was passed in May 1950 and the Bank launched its operations as a central bank on June 12, 1950. It was given a wide range of functions in relation to monetary & financial policy, bank supervision, and foreign exchange policy.
In 2013 Suh Young-kyung was appointed as the first female executive in the history of the bank; she was appointed as a deputy governor.
The primary purpose of the Bank is to pursue price stability.
Under the Bank of Korea Act (Article 1), the primary purpose of the Bank of Korea is pursuing price stability so as to contribute to the sound development of the national economy. The Bank of Korea implements this target through adjustments to its reference interest rate, the Base Rate.
The purchasing power of money depends on prices. When prices rise, the same amount of money buys less than before. Therefore, it is naturally the task of a central bank to safeguard the value of the money by keeping inflation low.
Prices are influenced by various factors such as corporate investment, household consumption and international prices of raw materials. Meanwhile, among the various policy instruments to bring about price stability, the monetary policy of a central bank, which adjusts the quantity of money in circulation, is the most effective.
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