Bank of Korea Governor Shin Hyun-song said the central bank removed the international foreign exchange reserves ranking table from its press releases after more than 25 years because the ranking itself has lost much of its practical relevance. He acknowledged, however, that halting publication without prior explanation was a communication failure and expressed a commitment to improve.
Shin made the remarks on the 12th in response to questions from People Power Party lawmaker Kim Sang-hoon during a National Assembly Strategy and Finance Committee audit held at the Bank of Korea headquarters in Jung-gu, Seoul. Kim pointed out that “the ranking table had been published for 25 years and 6 months, and it was suddenly removed without any prior explanation or clarification,” asking whether “it makes sense for a department to unilaterally delete long-published data based on its own judgment.”
Shin explained the context by referencing the circumstances when the ranking table was first published in February 2001. At the time, South Korea had just received an International Monetary Fund (IMF) bailout following the 1998 Asian financial crisis, and the trauma of the currency crisis was still vivid. The table was included in press releases as a statistic that could support the country’s external credibility. However, he added, questions grew over how much the ranking table actually helped measure South Korea’s external financial soundness, and its usefulness steadily declined.
Regarding suspicions that the decision was made to conceal a drop in rankings, Shin pushed back, saying, “On the contrary, we removed it from the press release when the foreign exchange reserves ranking went up.”
The Bank of Korea stopped publishing its “world foreign exchange reserves ranking” data starting last month. This marked the first time in 25 years since the statistics were first released in February 2001. At that time, the data was provided as comparative material to ease public anxiety following the currency crisis, but the bank has decided not to publish it going forward.
The Bank of Korea’s position is that there is no problem with making the data non-public because the reserves ranking is unrelated to external soundness. The logic is that an appropriate level of foreign exchange reserves is determined by a country’s economic size and stage of development, and therefore simply comparing reserve amounts without considering these conditions is inappropriate. The bank also argues that every rise or fall in the ranking has been exploited as political fodder, creating distorted perceptions.
Communication issues surrounding the decision to halt publication also came under scrutiny at the audit. Shin initially said that “reporters covering the Bank of Korea were briefed in advance and generally understood,” but when it was pointed out that no prior explanation had actually been given, he corrected his answer after being given another opportunity to speak. He clarified that “the intent was that sufficient verbal explanations were provided in advance in response to inquiries from individual reporters,” explaining that he had only individually explained the reasons for removing the ranking table to reporters who asked about it.
Shin emphasized, “There was a need to better communicate how much the ranking table actually helps measure our country’s external financial soundness,” adding, “We will correct these issues going forward and strengthen communication.”
