pressure on inflation from weakness in the economy, and weigh that against the upward pressure on inflation from higher input prices and supply chain disruptions. so let me tell you what we're doing in preparation. in recent years, we have invested in better information on supply chains, trade links and the connections between sectors. and this is helping us analyze the effects of supply disruptions including tariffs. we have begun assessing the possible consequences of different tariff scenarios, and present an example in this mpr. 2 / 3 bis - central bankers'speeches we are stepping up our outreach activities across the country to hear directly from those affected by trade uncertainty. this includes augmenting our surveys of businesses and consumers to better understand how trade uncertainty is affecting their decisions and how they would cope in the event of a trade conflict. we will update you on our analysis and assessments as developments unfold. having restored low inflation and reduced interest rates substantially, monetary policy is better positioned to help the economy adjust to new developments. as always, the bank will be guided by our monetary policy framework and our commitment to maintain price stability over time. with that, the senior deputy governor and i would be pleased to take your questions. 3 / 3 bis - central bankers'speeches

seongtae lee : the global financial crisis and the bank of korea's monetary policy keynote address by mr seongtae lee, governor of the bank of korea, at the euromoney conference, seoul, 28 may 2009. * * * greetings ladies and gentlemen, i am delighted to be here to speak at " the euromoney korean capital markets congress 2009 " with prominent institutional investors, financiers and academic experts from around the world. my remarks today will focus on the recent global financial crisis, the bank of korea's monetary policy response, and the tasks that remain in the future. development and impact of the global financial crisis ladies and gentlemen, as you know, this global financial crisis struck as the impact of the us sub - prime mortgage meltdown spread worldwide and it triggered a synchronized global economic downturn. the main reason that this financial crisis spread with such a wide range and at such unprecedented speed lies in the massive progress made in the integration of the world economy and financial markets over the last two decades. as this crisis progressed, korea and other emerging market countries were unable to avoid its impacts even though they did not have large sub - prime mortgage related exposures. rather they experienced deteriorating foreign currency supply and demand conditions and credit crunches, as funds flowed out due to deleveraging by overseas financial institutions in response to heightened concerns about credit risk. their real economies also slipped into recessions, as their exports shrank rapidly owing to the contraction of import demand in advanced countries. the bank of korea's policy response and its effects ladies and gentlemen, the bank of korea eased its monetary policy aggressively, to soothe the financial market unrest and ward off a sharp contraction of the real economy. it brought its base rate down by a total of 3. 25 percentage points, to its lowest level of 2 %, in six steps from last october until this february. along with this, it strove to expand provision of liquidity to sectors badly affected by the credit crunch through its open market operations and lending facilities. at the same time, it actively provided foreign - currency liquidity to domestic financial institutions through, for example, the swap market, in order to stabilize the foreign exchange market that was directly hit by the impact of the global financial crisis. it also entered into currency swap arrangements with the central banks of the united states, japan and china. the korean financial and foreign exchange markets have recently been showing a pattern of improved movements helped by these actions.