The government decided to review ways to develop a cooperation and communication channel where it can discuss macroprudential soundness and financial issues with the Central Bank and financial authorities.
Koo Yun-cheol, Deputy Prime Minister and Minister of Strategy and Finance, on the 30th held an expanded macroeconomic and financial meeting with Bank of Korea Governor Shin Hyun-song, Financial Services Commission (FSC) Chairman Lee Eog-weon, and Financial Supervisory Service Governor Lee Chan-jin at the Korea Federation of Banks in Jung-gu, Seoul, and said, "We will make policy coordination among the government, the Central Bank, and financial authorities even tighter," and stated accordingly.
Koo and other participants assessed that while the U.S. Federal Reserve (Fed) held its policy rate as expected, uncertainty persists over whether rates will rise or fall going forward due to the Middle East situation. However, they judged that domestic financial institutions have the capacity to respond even under crisis scenarios for key variables such as oil prices and exchange rates. The Ministry of Strategy and Finance and others decided to operate a 24-hour monitoring system and take stabilization measures when needed.
Koo and other participants decided to work closely with financial institutions to prepare without a hitch for a 24-hour opening of the foreign exchange market and the establishment of an offshore won settlement system. They also agreed to accelerate structural improvements in the foreign exchange and financial markets and to work together on structural reforms in the fiscal, public, and regulatory institutional sectors.
Koo said, "For industries sensitive to the Middle East war—such as petroleum refining, petrochemicals, and construction—we will continue to closely examine impacts on profitability stemming from raw material supply instability and expand support through financial policy and other measures."