Reuters: US Dollar Report: TIMELINE-Bank of Korea faces credibility gap

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TIMELINE-Bank of Korea faces credibility gap Apr 3rd 2012, 05:28 Tue Apr 3, 2012 1:28am EDT April 3 (Reuters) - Following is a timeline of key events since President Lee Myung-bak took office four years ago that have raised concerns about the credibility of the Bank of Korea in setting monetary policy. - - - - January 2009 - President Lee declares a crisis government to overcome the shocks from the global financial crisis and creates a weekly "war room-type" meeting that includes the finance minister and the central bank governor. The weekly meetings were held for almost the whole year. - - - - Sept. 10, 2009 - Bank of Korea Governor Lee Seong-tae tells reporters slight increases in the interest rate from record-low 2 percent do not necessarily mean an end in the accommodative monetary policy and it is the Bank of Korea that sets interest rates whatever the government or markets say. - - - - Between Sept. 10 and Oct. 9, 2009 - Government officials, including Finance Minister Yoon Jeung-hyun, say it is premature to consider implementing "an exit strategy" aimed at returning interest rates towards neutral levels. - - - - Oct. 9, 2009 - Bank of Korea holds rates steady for an eighth consecutive month and Governor Lee tells reporters that the markets have mistaken his remarks made the prior month as indicating the central bank is ready to raise the policy rate very soon. - - - - Jan. 7, 2010 - The finance ministry announces it will exercise for the first time in more than 10 years the right to send the vice minister to monthly Bank of Korea meetings to set interest rates, starting from the Jan. 8, 2010, meeting. - - - - March 12, 2010 - Kim Choong-soo, ambassador to the Organisation for Economic Co-operation and Development (OECD), tells a public radio channel the Bank of Korea is part of the government and it is not appropriate for the central bank not to cooperate with government policy. - - - - March 16, 2010 - President Lee names Kim, also former chief presidential economic policy secretary, to succeed Governor Lee who is stepping down at the end of his term. Bond prices rally the following day on expectations that interest rates will stay low for an extended period. - - - - April 15, 2010 - President Lee appoints Lim Seung-tae, a senior official at the financial markets regulator, as a central bank board member on the recommendation from the Federation of Korean Banks. Lim was the first incumbent government official to be appointed to the position. - - - - April 24, 2010 - President Lee fails to appoint the successor to Park Bong-heum until Park steps down at the end of his term. The Korea Chamber of Commerce and Industry has the right to recommend a candidate but local media and government sources say the president usually lists possible candidates. - - - - Between July 2010 and June 2011 - Bank of Korea rate decisions defy market expectations at seven out of 12 meetings -- holding rates four times and raising it for three times. Link this Share this Digg this Email Reprints

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