Macroeconomic and Financial Issues Meeting
Choi Sang-mok, Deputy Prime Minister for Economic Affairs and Minister of Economy and Finance, is presiding over the 'Macroeconomic and Financial Issues Meeting' held on the 14th at the Bankers' Hall in Jung-gu, Seoul.
Choi Sang-mok, Deputy Prime Minister for Economy and Minister of Strategy and Finance, said on the 14th regarding the highly volatile stock and foreign exchange markets, "If volatility in the financial and foreign exchange markets expands excessively, we will promptly implement active market stabilization measures in a timely manner."
The Ministry of Strategy and Finance announced that on the same day, it held an emergency macroeconomic and financial issues meeting (F4·Core Economic Authorities Meeting) chaired by Deputy Prime Minister Choi, attended by Lee Chang-yong, Governor of the Bank of Korea, Kim Byung-hwan, Chairman of the Financial Services Commission, Park Chun-seop, Senior Secretary for Economic Affairs, and Lee Se-hoon, Senior Deputy Governor of the Financial Supervisory Service.
The previous day, the Korean stock market saw both the KOSPI and KOSDAQ indices fall nearly 3% intraday due to net selling by foreigners. In particular, Samsung Electronics' stock price dropped to the 50,000 won range, the lowest since the onset of the COVID-19 pandemic in 2020, significantly impacting the decline in the stock indices.
The won-dollar exchange rate is also reaching new highs since the U.S. presidential election. The won-dollar exchange rate surpassed the 1,410 won level intraday amid strong dollar pressure and concerns over weakening Korean fundamentals following a potential Trump re-election. The exchange rate rising into the 1,400 won range marks the fourth time in history since the 1997 Asian financial crisis, the 2007 global financial crisis, and the 2022 U.S.-originated high interest rate shock.
Deputy Prime Minister Choi stated, "Given the ongoing uncertainties related to changes in the policy direction of the new U.S. administration, global economic growth and inflation trends, and major countries' monetary policy stances, we will maintain a heightened sense of vigilance and closely monitor market conditions through a 24-hour joint inspection system among related agencies."
He added, "I urged related agencies to maintain thorough cooperation and response systems according to contingency plans and to promptly implement active market stabilization measures if volatility in the financial and foreign exchange markets expands excessively."
Deputy Prime Minister Choi also said, "To stabilize the financial market, we will extend the currently operating market stabilization programs at the same level next year," and requested, "Please ensure the smooth operation of liquidity supply programs worth up to 37.6 trillion won for bond and short-term money market stabilization, and project financing (PF) soft-landing support programs worth up to 53.7 trillion won."
At the F4 meeting that day, participants reviewed domestic and international financial market trends following the U.S. presidential election and discussed future response directions.
The attendees agreed that in the transitional period before the new U.S. administration takes office, volatility is excessively high due to uncertainties about policy direction changes, and they agreed to strengthen efforts among related agencies to manage the financial and foreign exchange markets stably.
They also shared recognition of the need for industrial policies, including support for industries expected to face difficulties following the new U.S. administration's inauguration. Efforts will be intensified to expedite the passage of tax law amendments related to value-up support through the National Assembly, and structural foreign exchange supply and demand improvement measures will be reviewed alongside fundamental improvements in the stock market’s corporate governance and overall market structure.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
