Finance Minister Choo Kyung-ho expressed his concern on Tuesday that the conflict between Israel and Palestinian militant group Hamas has caused market uncertainty and is expected to lead to higher volatility in oil prices. He urged officials to monitor the situation and create economic contingency plans.
At a meeting with ministry officials to discuss ways to minimize the impact of the incident on South Korea’s economy, Choo said, “The international financial market has shown limited reactions to the incident, but uncertainty about its future developments is very high. It is needed to closely monitor the financial and foreign exchange markets at home and abroad round-the-clock and to check contingency plans again to best deal with various scenarios.”
The Finance Minister also predicted that the global oil market will experience greater volatility, and the government will take measures to prevent any supply disruptions. South Korea relies heavily on imports for its energy needs, and most of its crude oil and gas purchases come from the Middle East.
Choo also stressed the importance of monitoring the real economy and stabilizing prices. President Yoon Suk Yeol on Tuesday also warned of higher inflation and higher interest rates due to the conflict, and instructed the government to take action to prevent any further economic hardship.
The benchmark Korea Composite Stock Price Index dropped 0.26 percent to 2,402.58 on Tuesday, and the Korean won closed at 1,349.50 won against the greenback, up 0.4 won from the previous session’s close.