The government is reviewing the impact on domestic and global financial markets and the real economy from Middle East risk triggered by U.S. and Israeli airstrikes on Iran. Volatility has emerged, with international oil prices rising and Asian currency weakening, but the impact on stock and bond markets remains relatively limited, it said.
Vice Minister Lee Hyeong-il of the Ministry of Finance and Economy said at an afternoon briefing on the 2nd at Government Complex Seoul, following the "emergency interagency meeting to review the Middle East situation," that "international oil prices rose as the risk premium expanded, but the gains have narrowed compared with just after the market opened," and analyzed that "in international financial markets, preference for safe assets has grown, with the dollar and Swiss franc strengthening, while Asian currency such as the yuan, yen, and Taiwan dollar are weakening, showing a mixed pattern."
In fact, during the session that day, international oil prices at one point surged to $81.6 for Brent before the gains eased to around $79.4 in the afternoon. Stock markets also showed a split, with Japan's Nikkei falling while China's Shanghai Composite rose. Still, the Vice Minister said, "Uncertainty remains high, as Europe's stock markets, which have just opened, are widening their losses," keeping up a cautious stance.
Accordingly, the government plans to monitor the Middle East situation and its impact on Korea's real economy around the clock, centering on a "joint emergency response team." In particular, it will reconvene an interagency review meeting on the morning of the 3rd before the domestic stock market opens to further check overnight developments in the U.S. and European markets. The Vice Minister emphasized, "If any abnormal signs appear, we will respond swiftly under interagency coordination in line with the contingency plan for each scenario."
Measures to support logistics and corporations were also fleshed out. The Ministry of Finance and Economy said it has confirmed that no Korean vessels are currently transiting the Strait of Hormuz, and it asked shipping companies and associations to refrain from operating in Middle Eastern waters and to take safety measures. It also said it will accept reports of difficulties and damages to corporations stemming from the Middle East situation through the Ministry of SMEs and Startups and export support centers, and provide tailored support based on the identified circumstances.
On whether the situation will drag on, the Vice Minister said, "It is hard to predict," but added, "Because market impact can vary depending on how long the situation lasts, we will review conditions daily and implement necessary market-stabilizing measures."