On August 18, the Koinonia Team of HGU Received the ‘Bronze Prize’ at the Currency Policy Contest of the Bank of Korea. The team received the grand prize at the preliminaries in the Daegu area. The team consisted of Minjae Jung, Mina Park, Woojin Han, and Jeongsik Kim. All of these students were seniors majoring in the School of Management and Economics.

This year marks the 14^th anniversary of the Currency Policy Contest. The event was initiated in 2003 and participating students determined their standard of interest rate by the Monetary Policy Committee based on solid background and data. Through this completion, students have a mock experience regarding the determination of monetary policy and further enhance their understanding of the economic situation and the Korean monetary credit policy.

In the preliminaries which were held locally, explanatory data for determining a standard of interest rate as of August was provided. There was a fifteen minute power point presentation. Questions and answers were provided by evaluators for the next fifteen minutes. The HGU team prepared and presented on the top five major issues: the sluggishness of exports, the household debts, the restructuring of currency, Brexit, and the possibility of interest rate increases decided by the Federal Reserve.

In the final completion, discussion from the other side was added. The Team from Handong discussed the theme of “In case the economy is sluggish or deflation continues, the Central Bank needs to accept the minus interest rate policy or must organize a minus interest rate in the financial market.” The team promoted a discussion from the consent position. Twenty minutes were given for discussion and ten minutes were followed by remarks from the evaluators.

Mina Park said, “Covering the various topics under the limited conditions was evaluated positively. In addition, our team challenged the quantitative analysis at the undergraduate level and this was highly valued.”

According to Minjae Jung, “This result was possible because God helped me. I would like to express my deepest gratitude to Professor Saeil Ahn who guided our team. In this competition, we experienced economics applied to our daily lives. I felt great confidence in learning economics since I experienced the importance of economic policy. I felt proud to be studying economics.”  

According to Woojin Han, “I considered the areas that I could not learn at school in a classroom, through this competition. Now I can study how policies are decided and determined by the government as well as the currency authorities affect the lives of citizens.”

Student Jungsik Kim mentioned, “I can learn various conflict relationships between the positions of various organizations and policies starting with the economic terms and concepts. I directly experienced the practicality of economics beyond simple theories.”

※ Terminology

Base rate of the Bank of Korea refers to a standard policy interest rate when trading. The base rate includes sales RP with financial organizations, deposits and loans for financial adjustments.

The Monetary Policy Board, or the Bank of Korea determines the base rate by accounting for the prices of goods, services, financial assets and real assets. This is a medium of exchange and carries out a storage of value function. The determined rate of interest affects interest rates immediately. This leads to changes in the short and long term market interest rate, deposits and loans. A monetary policy is generally the process through which a central bank with a sole right to issue its own currency, maintains the value of that currency. Another explanation is, the value, and achieves sustainable economic growth by managing the amount of money in circulation, and the value of the money within the economy.

<Source: homepage of the Bank of Korea>

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