##ocation. thanks to the bok's decision to hold the policy rate steady in august and the government's strengthening of macroprudential policies, the rate of increase in housing prices in seoul and the growth of household debt began to slow from september onward, and financial imbalances started to ease. the reduction in pressure from financial imbalances following the rate hold in august demonstrates the effectiveness of policy coordination between monetary policy and macroprudential measures. this, i believe, paved the way for the possibility of two consecutive rate cuts in october and november. concluding remarks the bok operates under an inflation targeting framework, similar to those at advanced central banks. however, as a central bank in a non - reserve - issuing economy, the bok faces limitations in achieving both price stability and financial stability solely through monetary policy, compared to central banks in reserve - issuing economies. there 5 / 6 bis - central bankers'speeches remains the constant possibility of financial and foreign exchange market instability due to external shocks, and the potential conflict between policy objectives, such as price stability and financial stability, is more pronounced. going forward, the bok will continue to prioritize price stability as its main policy objective through inflation targeting, while combining a range of policy tools under an ipf to enhance financial stability and to mitigate any foreign exchange market volatility. thank you very much. 1 imf integrated policy framework, bis macro - financial stability framework. 2 bagehot's dictum 3 " addressing global dollar liquidity strains : the role of the federal reserve's swap arrangements. " frb notes, october 2016. 6 / 6 bis - central bankers'speeches

the commercial paper and corporate bond markets. the bok sought to balance the conflicting goals of price stability and financial stability by exploring a combination of layered policy measures to address both domestic and external factors. domestically, the bok addressed inflation and financial instability separately. the bok continued to raise the policy rate to ensure price stability while simultaneously implementing liquidity provisions to secure financial stability. as credit tightening caused by the real estate project financing crisis drove market interest rates much higher than intended by monetary policy and led to a contraction in bond issuance, the bok judged that it was necessary to reduce the risk premium to ensure that the monetary policy transmission channel worked properly. to this end, the bok expanded the range of eligible collateral for loans and conducted temporary repurchase agreement purchases ( repos ) as liquidity measures. these stabilization measures were 2 / 6 bis - central bankers'speeches temporary and targeted, which did not run counter to the macroeconomic monetary policy tightening stance. they were also consistent with the principle of avoiding fiscal dominance in monetary policy, as collateral was required and high interest rates were applied. 2 in response to external challenges, particularly the unexpected sharp depreciation of the currency, the bok implemented a combination of policy measures. these included the so - called " big step " - a 50 basis point increase in the policy rate - taken in october 2022 for the second time, following the first big step in july 2022, as well as foreign exchange interventions to control the pace of depreciation. due to structural weaknesses in korea's foreign exchange derivatives market, such as its small size and the high portion of short maturities, a rapid depreciation of the currency can trigger margin calls on derivatives and hedging transactions. this, in turn, could cause an adverse feedback loop by further driving up domestic interest rates. therefore, foreign exchange intervention is aimed not at targeting a specific level, but at controlling the speed of depreciation. these interventions contributed to stability in the foreign exchange market by managing the pace of depreciation and allowing market participants to adjust their expectations. this combination of monetary policy and foreign exchange intervention is a good example of the application of an ipf, particularly suited for economies with relatively underdeveloped foreign exchange markets. moreover, during periods of sharp currency depreciation, the bok set up a foreign exchange swap with the national pension service ( nps ) to stabilize the foreign exchange market. this helped mitigate demand for foreign exchange