South Korea's central bank chief warns of continued rate cut risks as political turmoil adds to economic pressure

South Korea's central bank governor, Lee Chang-yong, said on Thursday that continued rate cuts could be a source of anxiety, vowing to keep a close eye on risk factors to determine the pace of the central bank's monetary policy. The Bank of Korea will hold a rate-setting meeting this month as South Korea continues to face its worst political turmoil in decades. The political unrest has caused the won to fall to its lowest level since 2009 and weighed on South Korean stocks. The crash of a Jeju Air plane on Sunday, killing all but two of the 181 people on board, could further dampen consumer confidence. "Under the current circumstances, it is difficult to stabilize the economy with monetary policy alone," Lee said in his New Year's speech, warning that a continued leadership vacuum could weigh on markets. The Bank of Korea unexpectedly cut interest rates back-to-back times in the fourth quarter of last year to support the economy against trade headwinds as U.S. President-elect Donald Trump prepares to return to the White House. (Jin Shi)