SEOUL– South Korea’s top economic policymaker and the chief of the central bank will meet this week to discuss economic situations, the finance ministry said Thursday.

Finance Minister Hong Nam-ki and Bank of Korea (BOK) Gov. Lee Ju-yeol will have a breakfast meeting Friday, according to the Ministry of Economy and Finance.

The meeting comes amid concerns that the government’s plan to create another extra budget is not in sync with the BOK’s move toward monetary tightening.

Earlier in the day, the finance ministry proposed an extra budget of 33 trillion won (US$29 billion) to fund another round of COVID-19 relief aid packages for people in the bottom 80 percent income bracket and smaller merchants hit by the pandemic.

BOK Gov. Lee said last week the central bank is ready to raise the key interest rate “within this year,” stressing the need to orderly normalize its monetary policy amid the accelerating economic recovery.

In May, the BOK froze its policy rate at a record low of 0.5 percent. The central bank slashed the base rate by a combined 0.75 percentage point between March and May 2020 to bolster the pandemic-hit economy.

The ministry has dismissed the view that the two policies go in opposite directions.

The government said it is rather a “policy mix” under which the country supports vulnerable people with the fiscal policy, while the monetary policy focuses on easing financial imbalances.

Source: Yonhap News Agency