Bank of Korea: "Prompt Market Stabilization Measures in Case of Increased Volatility in Financial and Foreign Exchange Markets"

Bank of Korea Holds Market Situation Review Meeting

The Bank of Korea stated on the 19th that it will promptly implement market stabilization measures if volatility in the financial and foreign exchange markets excessively increases following the Federal Reserve's (Fed) hawkish interest rate cut.

Yoo Sang-dae, Deputy Governor of the Bank of Korea, is speaking at the joint press briefing on the plan to promote the CBDC usability test held on the afternoon of the 4th at the Bank of Korea Integrated Annex in Jung-gu, Seoul. Photo by Joint Press Corps

Yoo Sang-dae, the Deputy Governor of the Bank of Korea, held a 'Market Situation Review Meeting' at the Bank of Korea headquarters in Jung-gu, Seoul, on the morning of the same day to assess the impact of the Federal Open Market Committee (FOMC) results on the domestic financial and foreign exchange markets.

In the early hours of the day, at the December FOMC meeting, the Fed cut the policy rate by an additional 25 basis points (100 basis points = 0.01 percentage points) as expected by the market.

The Bank of Korea evaluated that amid ongoing external uncertainties such as the new U.S. administration's economic policy direction and geopolitical risks, the FOMC results suggest that the Fed's monetary policy easing could be considerably delayed.

Deputy Governor Yoo said, "It is assessed that the recent volatility in the domestic financial and foreign exchange markets, which temporarily expanded after the emergency decree, is easing."

However, he emphasized, "If such external uncertainties combine with domestic political situations and cause excessive volatility in the financial and foreign exchange markets, we will make every effort to promptly implement market stabilization measures."