Choo Kyung-ho: "Year-end financial and capital markets stable... Vulnerable factors like real estate PF remain latent"

Emergency Macroeconomic and Financial Meeting Held on the 14th

Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho, along with heads of financial institutions, are answering questions from the press after concluding the 'Emergency Macroeconomic Financial Meeting' held at the Bankers' Hall in Jung-gu, Seoul on the 14th. From left to right: Lee Bok-hyun, Governor of the Financial Supervisory Service; Lee Chang-yong, Governor of the Bank of Korea; Choo Kyung-ho, Deputy Prime Minister; Kim Joo-hyun, Chairman of the Financial Services Commission. Photo by Kang Jin-hyung aymsdream@

The Bank of Korea and the government stated that while the year-end funding situation in the financial sector is stable, there are some vulnerable factors such as real estate project financing (PF). Therefore, they will strengthen the 24-hour joint inspection system and swiftly implement market stabilization measures if necessary.

On the 14th, Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho, Bank of Korea Governor Lee Chang-yong, Financial Services Commission Chairman Kim Ju-hyun, and Financial Supervisory Service Governor Lee Bok-hyun held an emergency macroeconomic and financial meeting jointly with related agencies at the Federation of Korean Banks building in Jung-gu, Seoul, to review the domestic and international financial market situation.

The U.S. Federal Reserve (Fed) kept the policy interest rate unchanged once again at the Federal Open Market Committee (FOMC) meeting overnight, following the pauses in September and November. The statement assessed that inflation has been easing, and Fed officials projected three rate cuts (a total of 0.75 percentage points) next year.

Fed Chair Jerome Powell mentioned at the press conference that while he does not rule out the possibility of further rate hikes, the interest rate peak has nearly been reached during the monetary tightening process, and discussions on the timing of rate cuts have begun at this meeting.

Deputy Prime Minister Choo evaluated, "Accordingly, expectations for early rate cuts in global financial markets have increased, leading to a rise in stock prices and a sharp decline in interest rates and the value of the dollar."

Regarding the recent domestic financial market situation, Deputy Prime Minister Choo explained, "Stock prices and exchange rates have shown trends similar to major countries and have remained relatively stable. In the funding market, government bond yields have fallen, while corporate bond and short-term funding market rates have stabilized, showing generally favorable conditions."

He added, "In particular, the year-end funding situation in the financial sector is also being maintained stably, so the risk of fund movement due to high-interest deposits and the concentration of retirement pension year-end maturities has been considerably alleviated."

However, Deputy Prime Minister Choo emphasized that amid the ongoing burden of high interest rates and the potential expansion of global economic uncertainties such as the Middle East situation, as well as some vulnerable factors like real estate PF, the government and the Bank of Korea will remain vigilant and make every effort to manage vulnerable sectors to prevent increased market volatility during the year-end and New Year period.

Deputy Prime Minister Choo stated, "Under seamless cooperation among related agencies, we will closely monitor domestic and foreign financial and foreign exchange markets through a 24-hour joint inspection system, and if necessary, promptly implement market stabilization measures according to situation-specific response plans."

Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho is speaking about economic trends, including employment indicators, at the emergency economic ministers' meeting held at the Government Seoul Office in Jongno-gu, Seoul, on the morning of the 13th.
[Image source=Yonhap News]

Meanwhile, Deputy Prime Minister Choo shared his reflections on chairing the so-called 'F4 (Finance 4)' final meeting that day. The F4 (Finance 4) meeting is a body consisting of four key figures overseeing macro-financial and economic policies: the Deputy Prime Minister, the Bank of Korea Governor, the Financial Services Commission Chairman, and the Financial Supervisory Service Governor.

Deputy Prime Minister Choo plans to run for a third term as a member of the National Assembly in Dalseong-gun, Daegu, after stepping down from his position, and his successor has been nominated as former Chief Presidential Secretary for Economic Affairs Choi Sang-mok.

Deputy Prime Minister Choo said, "Because the economic situation was challenging, we met almost every Sunday without exception to diagnose and review various market situations and discuss necessary measures. I would like to express my gratitude for working together so that we could respond without difficulties."

Governor Lee Chang-yong said, "Despite difficulties, the Deputy Prime Minister took on a heavy responsibility and left great achievements. His decision to firmly establish fiscal flows in a sustainable direction will be recognized retrospectively as a contribution to our country."

Governor Lee especially noted, "Unlike other advanced countries, the Bank of Korea worked in close policy cooperation while the government managed fiscal affairs stably and strived for price stability over the past year."

He continued, "Over the past year and a half, we gathered, put our heads together, and had frank discussions about policy concerns. This was a great achievement in establishing a new foundation for policy cooperation. The active sharing of information in the meetings was possible because the Deputy Prime Minister fostered an open atmosphere and listened to the opinions of other agencies."