Deputy Prime Minister Lee Says, “Changing the Monetary Unit is Being Considered”

During the Special Committee on Budget and Accounts on September 16, Deputy Prime Minister and Minister of Finance and Economy Lee Hun-jae said that the modification of the monetary unit is in the beginning stages of an actual examination.

Deputy Prime Minister Lee said, “Although large denomination bills can be issued now, the modification of the monetary unit will be again needed in four or five years. Though it might be costly now, the modification must be examined to radically reform the monetary system.”

His statement can be construed that the government is focusing more on curtailing 1,000-won bills to 10- or 1-won bills, rather than issuing large denomination bills such as 100,000-won bills.

Although the modification of the monetary unit is costly in the beginning stages, it will improve the country’s foreign image and ease the data processing and settlement of accounts.

Deputy Prime Minister Lee explained, “Prices might rise in the process of modification. The issue is how to relieve the inflation.”

He added, “Psychological and emotional rejections, such as a sense of loss felt on the value of one’s own properties, are undeniable. The modification can be possible only after thorough examination and productive national discussion.”

Park Seung, the governor of the Bank of Korea, also said few days ago, “The investigation into the ways to improve the monetary system is completed. However, it’s the government’s job to carry it out. The matter will be thoroughly consulted with the government.”

Since it takes three to five years to prepare and enforce this, the actual operation of monetary unit reformation will take place in 2008 or 2010, if the government decides to change the monetary unit this year or next year.

Yong Park Kang-Woon Lee parky@donga.com kwoon90@donga.com