Dear fellow members of the Bank of Korea!
Today we start our first working day of 2021. I would like to begin by expressing my sincere gratitude to you all for so faithfully carrying out your duties throughout the past year under the new environment brought by COVID-19, including contactless working.
Our economy faced many difficulties during 2020, as shocks from COVID-19 continued throughout the whole year. The global economy went through the worst recession since World War II as a result of frequent lockdown measures in many countries and reduced trade. Financial markets at home and abroad were highly turbulent. The Korean economy is estimated to have represented negative growth for the first time since the currency crisis. Labor market conditions also worsened for the first time since the currency crisis. Labor market conditions also worsened severely, especially in the contact-based service industries and for temporary and daily employees. Inflation remained low in the 0 percent range, held down by weak demand and the fall in international oil prices.
Against this backdrop, the Bank of Korea operated accommodative monetary policy to calm the financial market unrest and prevent the real economy from shrinking sharply. In addition to the large Base Rate cuts, we increased the supply of Korean won and foreign currency liquidity, for instance by purchasing Treasury bonds and signing a currency swap arrangement with the US Federal Reserve.
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