Holding of Bank of Korea Market Situation Review Meeting
The Bank of Korea stated that with candidate Donald Trump winning the U.S. presidential election, there is a possibility of increased volatility in our foreign exchange and financial markets, and it will strengthen market monitoring.
On the morning of the 8th, Yoo Sang-dae, Deputy Governor of the Bank of Korea, held a 'Market Situation Review Meeting' at the Bank of Korea headquarters in Jung-gu, Seoul, and reviewed the impact of the U.S. presidential election and the Federal Open Market Committee (FOMC) results on domestic and international financial and foreign exchange markets.
At the early morning November FOMC meeting, the Fed (Federal Reserve) cut the policy interest rate by an additional 0.25 percentage points (25 basis points) as expected by the market.
The Bank of Korea evaluated that Fed Chair Jerome Powell assessed the U.S. economic situation as more resilient than expected, mentioned that monetary policy remains restrictive, and maintained a balanced stance, stating that future monetary policy decisions will be data-driven.
Deputy Governor Yoo explained, "Immediately after the U.S. presidential election, the domestic financial and foreign exchange markets saw the exchange rate rise and then largely reverse, and the volatility of other price variables such as interest rates and stock prices was relatively limited."
However, he added, "Given the increased uncertainty surrounding global growth and inflation trends and major countries' monetary policy paths, it is difficult to rule out the possibility of increased volatility in foreign exchange and financial markets depending on the detailed policies of the second Trump administration," emphasizing, "We will comprehensively review the impact of policy changes by the new U.S. administration on our conditions, strengthen market monitoring, and respond promptly as necessary."
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