President Moon Jae-in retained on Friday Lee Ju-yeol, the incumbent Bank of Korea Gov. and the head of Monetary Policy Committee, to serve another four-years for the nation‘s central bank, sending the market a sign that it will not pursue a drastic change in its monetary policy.

Cheong Wa Dae said the decision to reinstate Lee as the BOK chief signifies Moon’s willingness to “ensure neutrality and independence” of the central bank.

The reappointment came amid the South Korean economy facing mounting household debt, weak domestic consumption, and key rate hikes expected in major economies.

A higher key rate in the US, in particular, could place more burden for the South Korean economy already burdened with high household debt, according to experts. Lee may have to look into market risks, including a possible capital outflow, in case of rate hikes in the US and other advanced economies, they added. At the end of last year, South Korea’s household debt stood at 1,450.9 trillion won ($1.34 trillion), up 8.1 percent from a year earlier, according to BOK data.

Lee was named the BOK head by Moon‘s predecessor, ex-President Park Geun-hye in 2014. During his first term, the central bank faced a series of market volatility triggered by internal and external factors, including the sinking of Sewol, the Middle East Respiratory Syndrome and the political scandal involving the ex-president and business tycoons. But Lee has led the monetary policy with balanced views and also a series of currency swap agreements with major trade partners such as China, Canada and Switzerland for the last four years.

In a meeting with reporters after the announcement Friday, Lee said he felt “grave responsibility” to be nominated in an “unusual” decision.

The central bank nominee is subject to parliamentary hearing, but the National Assembly has no authority to veto the president’s nomination.

Lee holds a bachelor‘s degree in business administration from Yonsei University and a master’s from Pennsylvania State University. He started his career in the BOK in 1977 and built his entire career there.

By Son Ji-hyoung  (consnow@heraldcorp.com)