will have to work to ensure consistency in our policy communication with the public. 4 / 8 we should pay special attention this year to the stability of our financial and foreign exchange markets. in particular, in conditions where the negative policy rate gap between korea and the us has widened, any increase in risk aversion among global investors, due for example to the ongoing monetary policy normalization by the federal reserve, could cause greater capital flow volatility. in view of this, we will need to closely monitor how the changes in external risks affect our financial market variables and capital flows. starting from this year the bank will disclose the details of the market stabilization measures it takes, so that we can elevate the transparency of korea ’ s fx policy to bring it to global standards. we believe that this will improve the credibility of our policy, and contribute to stabilizing the fx market in the medium and long term. however, given the possibility of unexpected side effects developing under highly volatile market conditions, we will need to strengthen our monitoring. we should in addition devote continuous efforts to faithfully fulfilling our roles in international organizations and cooperative bodies, as befits the heightened global standing of korea and the bank, and to strengthening our cooperation channels as well. given the changes in our financial and economic environment, we will have to stand up to the new challenges posed to monetary policy operation. with the neutral 5 / 8 interest rate level having fallen worldwide since the global financial crisis, many are concerned that monetary policy might not have sufficient room for maneuver when the global economic cycle enters its next downturn. based on this recognition, the us federal reserve and others have already embarked on active discussions to review their monetary policy operating systems and instruments. in the same vein, our bank also needs to give deep thought to a policy operating system and instruments of our own suitable to the changes in conditions. with the rapid spread of the fintech innovation lately, the payment and settlement environment is changing greatly, as new payment methods are emerging and the participation of non - financial companies is expanding. we will need to support the vitalization of diverse payment services, in order to improve financial consumers ’ convenience and reduce the settlement fees. we must also redouble our efforts to identify in advance and prevent the risks that accompany these changes. moreover, considering the huge impacts on our economy overall that could result from any failure in our payment and settlement system, due to a natural disaster for example, we will need to devote our utmost efforts

s future result from the recognition of these risks. excessive pessimism is undesirable, but we do need to stay vigilant and come up with the necessary measures for coping with 2 / 8 these problems. major countries have already been accelerating their efforts to advance and converge their industries in order to seize the initiative in this era of the fourth industrial revolution. our top priority should be to enhance our productivity through restructuring, and to nurture leading industries that will serve to drive the future growth of our economy. we will need to carry out policies to expand our engines for growth in a systematic and consistent manner over a longer - term horizon. my fellow members of the bank of korea, let me talk now about the main tasks that the bank of korea will need to focus on in its operations this year. first of all, we will have to conduct our monetary policy so as to ensure that economic growth remains stable, and that consumer price inflation can converge to the target level over a medium - term horizon. given the forecast that our economy will continue to grow at a rate in the middle - to upper - 2 % range, and that the demand - side inflationary pressures will not be large, we will need to maintain our accommodative monetary policy stance. in this process we will have to consider, in a balanced manner, macro - economic conditions such as the domestic economic and 3 / 8 inflation trends, together with financial stability conditions including the build - up of household debt. we will maintain our inflation target at 2 %, but from this year will not set a fixed period for achieving it, as is also the practice in other major advanced economies. this change has been made with the aim of anchoring the inflation expectations of economic agents at around the target level, to help them engage in economic activities stably. it will also enable us to operate our monetary policy more flexibly in the medium and long term. we will work as well to enhance economic agents ’ understandings of inflation conditions by publishing reports reviewing the status of our inflation target operations. in times of high uncertainty about economic conditions, as at present, the accurate judgment of financial and economic circumstances is more important than ever to enhance our monetary policy ’ s effectiveness. we will need to increase our precision in economic forecasting by expanding the indicators that we use and improving our forecasting models, while also strengthening our analysis of financial stability conditions by improving our methods of financial system risk assessment. and on this foundation, we