People walk on a street in Seoul, South Korea, March 16, 2022. (Photo by James Lee/Xinhua)
South Korea's finance ministry emphasized the need for preemptive measures against risk factors in the financial markets at home and abroad.
SEOUL, May 7 (Xinhua) -- South Korea's finance ministry said Friday that preemptive measures would be necessary to tackle the financial market volatility following the U.S. Federal Reserve's interest rate hike.
Vice Minister of Economy and Finance Lee Eog-weon told a meeting with economy and finance officials that external uncertainties continued to run high and it raised the possibility of higher volatility in the financial and foreign exchange markets.
Lee emphasized the need for preemptive measures against risk factors in the financial markets at home and abroad, saying the government will proactively tackle the risk factors, if needed, in a bold and expeditious manner.
The remark came after the U.S. central bank raised its benchmark interest rate by half a percentage point to a range of 0.75 percent to 1.00 percent and indicated the reduction of asset holdings on its 9 trillion-U.S. dollar balance sheet.
Photo taken on Feb. 28, 2022 shows the U.S. Department of the Treasury in Washington, D.C., the United States. (Xinhua/Liu Jie)
Fed Chairman Jerome Powell told a news conference that the 50-basis-point rate increase "should be on the table at the next couple of meetings," but he noted that "seventy-five basis points is not something" the Fed is considering.
Powell's remarks raised market volatilities, according to the South Korean finance ministry.
U.S. stocks ended higher and the dollar index fell on the day when the Fed tightened its monetary policy, while U.S. stocks went lower and the dollar index picked up the following day.
South Korean stocks ended 1.23 percent lower on Friday, while the local currency depreciated versus the greenback. The South Korean financial market was closed on Thursday for Children's Day holiday.
The Bank of Korea hiked its policy rate by 25 basis points to 1.50 percent in April, after lifting it by a quarter percentage point in January.■
