Choi Sang-mok Emphasizes Vigilance Amid External Uncertainties
Government to Maintain 24-Hour Monitoring of Financial and Foreign Exchange Markets
The government stated that it will respond with caution to external uncertainties surrounding the monetary and foreign policies of the new U.S. administration, including the Federal Open Market Committee (FOMC)'s decision to keep policy interest rates unchanged.
On the 30th, Choi Sang-mok, Acting Prime Minister and Minister of Economy and Finance, said at a macroeconomic and financial issues meeting, "Given that external uncertainties surrounding the new U.S. administration's monetary and foreign policies remain significant, each agency will maintain a high level of vigilance and uphold a 24-hour joint monitoring system for financial and foreign exchange markets in cooperation with related institutions."
At the meeting attended by Lee Chang-yong, Governor of the Bank of Korea, Kim Byung-hwan, Chairman of the Financial Services Commission, and Lee Bok-hyun, Governor of the Financial Supervisory Service, the impact of the FOMC's rate-hold decision and the concretization of the new U.S. administration's policies on domestic and international financial and foreign exchange markets was reviewed and response strategies were discussed.
The FOMC, which convened overnight, kept the benchmark interest rate unchanged (upper bound at 4.50%) for the first time in five months since August last year. Chairman Powell stated at the press conference that there is no need to rush additional rate adjustments and expressed a cautious stance regarding future policy directions.
The international financial markets accepted the meeting results, including the rate hold, as expected, and major indicators such as stock prices and interest rates showed generally limited movements.
The participants agreed that although volatility in international financial markets has somewhat eased recently, the possibility of a delayed U.S. rate cut has increased, and during the holiday period, major countries' stock markets showed increased volatility centered on tech stocks. Therefore, it is necessary to closely monitor the domestic financial and foreign exchange market situation after the holidays.
Acting Prime Minister Choi instructed, "To ensure that there is not a single tremor in our external credibility, we will hold a Korea Investment Roadshow (IR) led by the Ambassador for International Financial Cooperation within this month to actively explain the sound fundamentals of our economy to the international community, and the entire government will make thorough preparations for future annual consultations with global credit rating agencies."
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