Bank of Korea(BOK) Governor Lee Ju-yeol said on Tuesday that although he agrees on the need for eased monetary policy, he is concerned that such measures may hurt South Korea's financial stability.

Lee made the remark during an international conference co-hosted by the central bank, the Korea Institute for International Economic Policy(KIEP), and the Petersen Institute for International Economics(PIIE).

In a keynote speech at the conference focused on the monetary policy in small open economies, Lee said that monetary policy needs to be managed in a way that takes note of its impact on financial stability while assisting the recovery of economic growth.

Lee noted that maintaining an eased monetary policy is necessary for small open economies in order for them not to be continuously mired in a low growth trap, but cautioned that such moves should not harm financial stability. 

He said that small open economic systems are more vulnerable to excessive monetary easing as they are susceptible to sudden capital outflow and depreciation of currency as a result of an external impact.