The Democratic Party of Korea's Finance and Economy Planning Committee held a working-level party–government meeting with the Ministry of Economy and Finance at the National Assembly on the morning of the 6th. As geopolitical uncertainty has grown due to the "Iran situation," widening volatility in exchange rates and financial markets, the meeting sought solutions. The discussion covered passage of the "three exchange-rate bills" to stabilize the foreign exchange market and measures to respond to the domestic economy.
Rep. Jeong Tae-ho, the ruling party's secretary on the finance committee, told reporters right after the working-level party–government talks that "we plan to open a subcommittee on bills next week to review the 'three exchange-rate bills.'" Jeong said, "It is difficult to handle them at the plenary session on the 12th due to the schedule, but we think it may be possible at the plenary session on the 19th," adding, "the government has also requested swift passage to stabilize exchange rates."
The "three exchange-rate bills" focus on inducing funds that have flowed overseas to return home and easing supply–demand imbalances in the foreign exchange market. Key points include introducing a capital gains tax deduction for selling overseas stocks through revisions to the Act on Restriction on Special Cases Concerning Taxation, creating a capital gains tax deduction for products hedging exchange-rate risk fluctuations, and temporarily raising the exclusion-from-taxable-income rate applied to income from dividends received from foreign subsidiaries.
Jeong also noted the possibility of adjusting the effective dates of some measures during the bill review. He said, "For the account for returning to the domestic market, benefits are to be applied if the account is opened within the first quarter, but given the delay in passage, we believe an adjustment to the effective date is needed," adding, "this may be reflected during deliberations."
Meanwhile, the party–government meeting also discussed economic response measures to the Middle East's geopolitical instability. Jeong said, "The previous day, members of the National Assembly's finance, foreign affairs, and industry committees held a meeting with the business community to hear corporations' views and conveyed them to the government," adding, "the refining industry asked the government to share its phased plan to release strategic reserves and suggested (to the government) the need for additional support to cover differences in transportation costs arising from diversifying crude oil import sources."
Deputy Prime Minister for Economic Affairs Koo Yun-cheol, regarding the response to the surge in fuel prices, said, "After on-site inspections to determine whether gas stations are engaging in profiteering, we are also considering additional measures, such as setting maximum prices by fuel type and region, if necessary."
He added, "We will respond with a zero-tolerance principle to acts that exploit a national crisis to take excessive profits."
Koo also said, "There are small and medium-sized enterprises experiencing export difficulties as transportation disruptions occur due to the Middle East situation," adding, "to support them, we will prepare financial support measures of about 20 trillion won and, if necessary, take additional steps so that small and medium-sized enterprises do not face a credit crunch."