▲ Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol takes a commemorative photo with attendees at the expanded macroeconomic and financial meeting held at the Government Complex-Seoul in Jongno-gu, Seoul, on September 17. From left are Financial Supervisory Service Governor Lee Chan-jin, Deputy Prime Minister Koo, Bank of Korea Governor Shin Hyun-song, and Financial Services Commission Chairman Lee Eok-won.
The country's economic and financial chiefs assessed on September 17 that the impact of the U.S. interest rate hike—the first in 3 years and 2 months—on the South Korean market would be limited.
However, they decided to respond promptly to the growing repayment burdens faced by vulnerable borrowers resulting from rising interest rates, and to implement market stabilization measures if excessive herd behavior or concentration occurs in the government bond market.
The Ministry of Economy and Finance stated that Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol presided over an expanded macroeconomic and financial meeting at the Government Complex-Seoul this morning to discuss global financial market trends following the U.S. benchmark interest rate hike decision.
The meeting was attended by Bank of Korea Governor Shin Hyun-song, Financial Services Commission Chairman Lee Eok-won, and Financial Supervisory Service Governor Lee Chan-jin, collectively known as the "F4."
The U.S. Federal Reserve (Fed) raised its benchmark interest rate on this day for the first time in 3 years and 2 months, and signaled the possibility of additional hikes within the year.
Regarding this, attendees analyzed that the hike was implemented "in consideration of solid economic and employment conditions, persistently high inflation levels, recent surges in international oil prices, and expanding geopolitical uncertainties."
They evaluated that "since this hike has already been priced into the market and financial market conditions are generally stable overall, the market impact of this rate increase will be limited."
The attendees agreed to pay close attention to the Fed's strengthened commitment to price stability, the possibility of further rate hikes within the year, and monetary policy decisions scheduled for this week by the Bank of Japan (BOJ) and the Bank of England (BOE).
In addition, they decided to closely monitor international oil prices and global capital flows, and to review the impact on domestic financial and foreign exchange markets through close cooperation among related agencies.
The attendees noted the recent increase in government bond market volatility and agreed to monitor future trends closely.
They stated, "In the event of excessive market concentration, we will make every effort to ensure market stability, including implementing necessary market stabilization measures."
The attendees also discussed recent upward trends in lending rates and the possibility of heavier repayment burdens on vulnerable borrowers.
They stated, "We will proceed without a hitch on the previously announced support measures for vulnerable borrowers while drawing up supplementary plans if necessary."
Furthermore, the attendees reviewed the impact of recent changes in internal and external economic conditions, such as the current account surplus, on market liquidity.
They decided to closely monitor capital flows and liquidity conditions to check their impact on the financial and asset markets.
Deputy Prime Minister Koo, who is approaching his retirement, expressed gratitude to the attendees and requested that "the economic and financial team respond swiftly and organically based on the cooperative framework built thus far."
The National Assembly's Strategy and Finance Committee adopted the confirmation hearing report for nominee Lee Hyung-il as Deputy Prime Minister and Minister of Economy and Finance on this day.
(Photo provided by the Ministry of Economy and Finance, Yonhap News)
※
Copying, redistribution, and unauthorized use in AI training are strictly prohibited.