South Korea's financial authorities stated on December 15 that they will take bold, preemptive measures to curb market volatility amid the weakening Korean won and rising bond yields. Financial Services Commission Chairman Lee Eog-weon acknowledged recent market instability despite economic recovery, emphasizing the nation's economic resilience. The authorities decided to extend bond market stabilization funds and real estate project financing through next year.
On December 15 in Seoul, Financial Services Commission (FSC) Chairman Lee Eog-weon met with private experts and government officials to discuss financial market stabilization measures. He assessed that the country's financial markets had shown stability in the second half of the year due to improved economic conditions and a bull run in the stock market, but pointed out recent rises in bond yields and increased volatility in the currency market.
"Despite increased market volatility, the country's economic resilience is strong enough to shake off risks," Lee said, citing the financial soundness of firms, ample foreign reserves, and low credit risks. The Bank of Korea (BOK) froze its key rate at 2.5 percent late last month to safeguard stability amid a weakened local currency and an unstable housing market. However, market players bet that the central bank's easing cycle has ended or may be protracted.
The Korean won closed at 1,473.7 won against the U.S. dollar on Friday (December 12), nearing the 1,500 won level. To calm volatility, the authorities decided to extend 38 trillion won ($25.7 billion) in bond market stabilization funds and 61 trillion won in real estate project financing measures through next year.
The FSC chief stated that household debts, real estate-related loans, and other potential risks have been well managed. "But there are chances of market volatility increasing down the road, and we are ready to take bold, preemptive actions if necessary, while closely monitoring market conditions," he emphasized. This meeting reflects efforts to bolster domestic financial stability amid global uncertainties.
