Kim Yong-beom, Deputy Minister of Economy and Finance, "Domestic Financial Market Stable... However, Caution Needed on Widening Short- and Long-Term Interest Rate Gap"

Macroeconomic and Financial Meeting

"We will be fully committed to maintaining stability in the financial sector, paying close attention to the possibility of increased market volatility."

"The Lunar New Year livelihood stabilization measures will include various plans to support vulnerable groups and revive domestic demand."

Kim Yong-beom, Vice Minister of Strategy and Finance, is delivering opening remarks while presiding over the 'Macroeconomic Financial Meeting' held on the 19th at the Bankers' Hall in Jung-gu, Seoul.

[Sejong=Asia Economy Reporter Joo Sang-don] Kim Yong-beom, 1st Vice Minister of Strategy and Finance, stated on the 19th, "Although the domestic financial market is showing a relatively favorable trend, we must be cautious about some emerging volatility."

On the same day, Vice Minister Kim held a macroeconomic and financial meeting at the Seoul Banking Hall to review domestic and international financial market trends and real economy impacts due to COVID-19, as well as future response measures.

Vice Minister Kim explained, "A notable feature is the widening gap between long-term and short-term interest rates as government bond yields, especially long-term ones, have recently risen." He added, "The rise in domestic long-term interest rates is due to a complex combination of factors, including the increase in U.S. interest rates, caution over domestic government bond supply and demand, improvements in domestic and international economic indicators, and expectations for early commercialization of vaccines, which have eased risk aversion."

Regarding this phenomenon, Vice Minister Kim said, "It is occurring in major countries," but emphasized, "The government will monitor changes in domestic and international conditions and long-term interest rate responses, paying close attention to the possibility of increased market volatility, and will make every effort to maintain stability in the financial sector."

The government is focusing on supporting vulnerable sectors, keeping in mind that the success of economic recovery depends on the speed and strength of recovery in these sectors. Vice Minister Kim stated, "In the first quarter, when the employment shock is expected to be the greatest, we will concentrate on hiring 80% (830,000 people) for direct job projects and 44% (28,000 people) for social service jobs." He added, "We will also expedite 38% (5.1 trillion won) of the budget for job execution management and devise tailored measures for employment-vulnerable groups such as youth and women."

Furthermore, the government plans to soon announce the 'Lunar New Year Livelihood Stabilization Measures,' which will include various plans to support vulnerable groups and revive domestic demand.

Vice Minister Kim said, "Thanks to the public's cooperation in enduring inconveniences and hardships for their livelihoods and participating in quarantine efforts, we are overcoming the peak of the third wave of COVID-19." He added, "The government will also do its utmost to break the chain of crisis by gathering the efforts of the people and to get on the path of economic recovery and rebound."