South Korea says it is ready to use stabilization mechanisms for financial marke

[Enrico Macias]

South Korea says it is ready to use stabilization mechanisms for financial markets if needed.

Deputy Finance Minister Lee Ok-won said South Korea plans to introduce a series of measures to stabilize financial markets if needed. After the US Federal Reserve (Fed) signaled that it would raise interest rates in March. to extract inflation

The Ministry of Finance assesses that The Fed's monetary policy has signaled a strong direction (Hawkish), but South Korea's financial markets are expected to be less affected by the policy.

Fed Chairman Jerome Powell gave a press briefing after the monetary policy meeting this morning. “There is still a possibility that the Fed will raise interest rates without affecting the labor market. And the Fed does not deny the possibility that There could be a rate hike of more than 0.25% considering the spike in inflation.”

The Fed also said it would continue to cut $30 billion in its quantitative easing (QE) bond purchase program in February. This will result in the end of the Fed's QE in March. Along with starting to raise interest rates in that month as well.

“The global financial markets were slightly volatile in trading last night. And the foundation of the South Korean economy remains strong," Lee said at a government meeting on financial markets.

Mr Lee said The government will closely monitor the situation of both domestic and international markets. Because there is still uncertainty about the speed of the Fed's rate hike. including the risk of inflation from around the world

"If necessary The government will issue a joint policy with the Bank of Korea (BOK) to formulate measures to stabilize the financial markets at appropriate times. This includes purchasing central bank bonds,” Lee said.