Choi Sang-mok "Prospect to expand short-term volatility...Need a calm response"

Regarding the U.S. Federal Reserve lowering its benchmark interest rate by 0.25%p, but hinting at a pace of further cuts next year, Deputy Prime Minister and Minister of Strategy and Finance Choi Sang-mok called for a calm response, predicting that volatility will expand in the short term in our financial and foreign exchange markets.

Deputy Prime Minister Choi made the remarks at a macroeconomic finance meeting with Bank of Korea Governor Lee Chang-yong, Financial Services Commission Chairman and Financial Supervisory Service Chairman Lee Chang-yong at the National Federation of Banks Hall this morning.

Deputy Prime Minister Choi said the U.S. Treasury yields and the dollar rose sharply as the Fed hinted at the possibility of adjusting the pace of monetary policy easing, adding that the Korean financial and foreign exchange markets are also expected to see increased volatility in the short term.

However, he said an excessive push in one direction could involve a large reaction in the opposite direction going forward and that it was time for a calm response from market participants.

At the same time, the government and the Bank of Korea emphasized that they will continue to operate the 24-hour financial and foreign exchange market inspection system with high vigilance and implement additional market stabilization measures boldly and quickly in case of excessive volatility.

In addition, the government said it will include measures to improve foreign exchange supply and demand to stabilize the foreign exchange market and secure foreign currency liquidity, revitalize foreign exchange transactions during the extended period, and improve the trading infrastructure related to the global government bond index in next year's economic policy direction.

In addition, he said he will devise measures to strengthen financial companies' financial capacity, ease the financial burden on small business owners through co-prosperity with the banking sector, and support the common people's finance, including a moratorium on imposing additional capital accumulation obligations for each bank differentially.

He also mentioned that he will continue to advance capital markets, such as value-ups and resumption of short selling.