Ministry of Economy and Finance Holds Emergency Economic Response TF Meeting Within the Ministry
[Asia Economy Sejong=Reporter Kwon Haeyoung] Bang Giseon, the 1st Vice Minister of Strategy and Finance, stated on the 26th, "Since our financial market has recently become more synchronized with major countries, we will maintain heightened vigilance and strengthen monitoring of market trends."
Vice Minister Bang held an emergency economic response task force (TF) meeting within the ministry that morning to review financial·foreign exchange market trends and discuss future response directions.
He said, "Risk-averse sentiment has spread throughout the market due to the UK's announcement of a large-scale government bond issuance as an economic stimulus measure, and major stock prices in the US and Europe have fallen while the dollar continues to strengthen," adding, "We must maintain close cooperation and response systems among related agencies with heightened vigilance and monitor market trends."
In particular, Vice Minister Bang emphasized, "To alleviate the supply-demand imbalance in the foreign exchange market, efforts should be made to promptly execute the $10 billion foreign exchange swap between the foreign exchange authorities and the National Pension Service that has already been announced, and actively continue consultations with financial authorities and policy financial institutions to resolve difficulties faced by shipbuilding companies in selling forward exchange contracts due to credit limit restrictions caused by the rising exchange rate." He also urged, "If necessary, the foreign exchange authorities should make thorough preparations to directly purchase forward exchange contracts from shipbuilding companies."
The recent 'King Dollar' phenomenon (ultra-strong US dollar) has intensified due to the US Federal Reserve's (Fed) high-intensity tightening policy, the prolonged Ukraine crisis, Europe's energy supply crisis, and concerns over China's economic slowdown. Over the past weekend, the UK announced an economic stimulus plan through large-scale government bond issuance, further spreading risk-averse sentiment. The won-dollar exchange rate soared to 1,423.4 won in the Seoul foreign exchange market on this day, surpassing 1,420 won for the first time since March 31, 2009, during the global financial crisis.
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