President Yoon Suk-yeol is speaking at the 10th Emergency Economic and Livelihood Meeting held at the Yongsan Presidential Office Building in Seoul on the morning of the 7th. 2022.10.7 Photo by Presidential Office Press Photographers Group [Image source=Yonhap News]
[Asia Economy Sejong=Reporter Son Seonhee] In August, the current account balance turned to a deficit for the first time in four months, triggering an emergency response from the government. On the 7th, the government announced, "We will make every effort to be fully prepared to immediately activate foreign currency liquidity supply channels to financial institutions in case of emergency," amid concerns over increased volatility in the foreign exchange market due to the current account deficit.
On the same day, the government held the 10th Emergency Economic and Livelihood Meeting chaired by President Yoon Seok-yeol to establish a response strategy for the international balance of payments. Following the meeting, the Ministry of Economy and Finance stated in a press release, "To minimize the negative impact of increased volatility in the current account on the foreign exchange market, we will continue multifaceted policy efforts to stabilize foreign exchange supply and demand."
Previously, the foreign exchange authorities signed a foreign exchange swap agreement with the National Pension Service with a limit of 10 billion USD and announced a support plan to sell forward contracts worth 8 billion USD for shipbuilders. The authorities emphasized, "We will promptly implement additional measures as necessary depending on future foreign exchange supply and demand conditions and liquidity situations."
Furthermore, they stated, "To improve the structural health of the current account, we will mobilize cross-ministerial capabilities for a full-scale response by early next year." In addition to the six previously announced measures including semiconductors, exports, and overseas infrastructure orders, a total of 18 new measures will be prepared and promoted by early next year.
In addition to the 'Energy Saving and Efficiency Measures' announced last month, plans will be made to domestically convert and improve efficiency for major imported items such as materials, parts, equipment, and food.
The Ministry of Economy and Finance said, "To enhance the structural stability of our current account, which has mainly relied on a surplus in the goods balance, we will sequentially prepare and announce measures to strengthen the competitiveness of key service industries such as tourism, transportation, and content by early next year."
In this regard, the government judged that external uncertainties will continue for the time being and plans to operate a cross-government 'Economic Situation Joint Inspection Team' 24 hours a day.
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