The South Korean government declared on Thursday that it would increase its monitoring of potential volatility in financial and foreign exchange markets due to the potential of further interest rate hikes in the United States and geopolitical risks. The Federal Reserve kept its benchmark rate unchanged and its chair, Jerome Powell, signalled the end of the monetary tightening cycle, although he left the door open for additional hikes to manage inflation.
At the macroeconomic meeting, First Vice Finance Minister Kim Byoung-hwan stated, “We cannot discount the possibility of more rate hikes as inflationary pressure in the US and other major economies remains high and there are numerous geopolitical uncertainties. The government will remain vigilant and increase its oversight of the market.” Representatives from the Bank of Korea, the Finance Services Commission, and other related organizations were present at the gathering.
The ministry also reported that the government would prepare contingency plans for various scenarios and swiftly carry out measures to reduce the effect of global economic uncertainties on the local financial and foreign exchange markets. South Korean stocks opened significantly higher on Thursday, following the positive performance of Wall Street, as investors welcomed the Fed’s decision and hoped for an end to aggressive rate hikes.
This AFP photo shows Federal Reserve Board Chairman Jerome Powell speaking during a news conference in Washington on Nov. 1, 2023. (PHOTO NOT FOR SALE) (Yonhap)
graceoh@yna.co.kr
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