Moon taps IMF director as new central bank chief

President Moon Jae-in on Wednesday tapped Rhee Chang-yong, director of the Asia and Pacific department at the International Monetary Fund, as the nation’s next central bank chief, but the nomination set off a new war of words as President-elect Yoon Suk-yeol’s office said it wasn’t consulted on the selection.

Rhee’s nomination comes on the heels of an apparent weekslong power struggle between the outgoing Moon and the incoming Yoon administrations on naming key staff members. This had prompted worries that the Bank of Korea would face a leadership absence for the first time in history after the current chief Lee Ju-yeol steps down on March 31.

A Cheong Wa Dae official told reporters on condition of anonymity on Wednesday that Yoon had been consulted on Rhee’s nomination to resolve the issues surrounding the BOK’s possible leadership vacuum.

However, Yoon’s office refuted the claims, saying that the president-elect has yet to name his administration’s candidate for the position, casting a cloud over Rhee’s nomination.

The tension continued to escalate throughout the day with Yoon’s chief of staff, Chang Je-won, denying that any prior consultation with the president-elect’s office regarding Rhee’s nomination had taken place, indicating that Yoon was kept in the dark about the recommendation.

“There were no agreements nor recommendations on our part,” Chang explained to reporters.

“Some news reports are calling the nomination an olive branch from Cheong Wa Dae, which I cannot agree on.”

Moon’s office fired back, telling Yoon’s office that they will ”reveal all if they continue lying,” and that they were taken aback by their reaction.

On Rhee’s nomination, President Moon’s senior secretary for public communication, Park Soo-hyun, said he was chosen for his experience and knowledge in monetary and financial areas alongside the trust he gained from his colleagues. Park also mentioned his strong global network, which industry insiders said he could utilize in coming up with monetary policies aligned with the global economy to help stabilize inflation and the overall financial market.

Under the nation’s Bank of Korea Act, Lee will be appointed as BOK governor “after deliberation by the State Council and a confirmation hearing at the National Assembly.”

The 61-year-old nominee became director of the Asia and Pacific department of the IMF in 2013 after serving two years as chief economist at the Asian Development Bank.

He previously served as vice chief of the G-20 Preparation Committee, vice chief of the Financial Services Commission and was an economics professor at Seoul National University before becoming the ADB’s chief economist.

Rhee has a bachelor’s degree in economics from Seoul National University. He held numerous posts as an economic adviser in the private sector after completing a Ph.D. in economics at Harvard University in 1989.

The tension between Moon and Yoon has been mounting, with both sides failing to bridge their differences over a myriad of issues in addition to key nominations. These issues include pardoning imprisoned former President Lee Myung-bak and relocating the presidential office to the main Defense Ministry building in central Seoul.

A planned meeting between the two was canceled last week, breaking the tradition that the outgoing president greets the elect within 10 days after the election. Yoon was elected on March 9.

By Jung Min-kyung (mkjung@heraldcorp.com)