Korean market holds steady after U.S. Fed cuts interest rate

Home > Business > Economy

Korean market holds steady after U.S. Fed cuts interest rate

Published: 08 Nov. 2024, 11:15 Updated: 11 Nov. 2024, 11:38

SHIN HA-NEE
shin.hanee@joongang.co.kr

Audio report: written by reporters, read by AI

From left: Financial Supervisory Service Gov. Lee Bok-hyun, Bank of Korea Gov. Rhee Chang-yong, Finance Minister Choi Sang-mok and Financial Services Commission Chairman Kim Byoung-hwan at a senior official meeting on macroeconomic issues held at the Export-Import Bank of Korea in western Seoul on Friday. [JOINT PRESS CORPS]

The Korean market remained relatively calm as the U.S. Federal Reserve implemented a widely expected 25-basis-point cut in its key interest rate, following a moderation in the election-driven volatility spike in the value of the dollar.

The government assured that the current market situation remained stable but promised to take necessary measures if short-term volatility increases.

“The global financial market remained largely stable as the FOMC [Federal Open Market Committee]’s decision was in line with expectations, and the impact of the U.S. presidential election results has been mitigated,” said Finance Minister Choi Sang-mok during a senior official meeting on macroeconomic issues in western Seoul on Friday.

However, Choi also said that “geopolitical risks in the Middle East and Ukraine, as well as the rising protectionist trend, may further drive uncertainties in the future regarding economic growth, inflation and monetary policies in major economies.”

The meeting was attended by the country’s economic chiefs, including Bank of Korea Gov. Rhee Chang-yong, Financial Services Commission Chairman Kim Byoung-hwan and Financial Supervisory Service Gov. Lee Bok-hyun.

The government will remain alert, the minister promised, stating that “the multi-branch, around-the-clock monitoring system, currently focusing on the Middle East situation, will be extended to the financial and foreign exchange markets.”

“We will take necessary measures according to the contingency plan if market volatility increases excessively,” said Choi.

The central bank also held a separate monitoring meeting to assess the market situation, chaired by Bank of Korea Senior Deputy Governor Ryoo Sang-dai.

Ryoo said that the brief market fluctuation following the U.S. election remained largely limited.

Nevertheless, “it is difficult to rule out the possibility of increased volatility in the foreign exchange and financial markets based on the second Trump administration’s policies amid heightened uncertainties,” Ryoo said, adding that the central bank will remain vigilant to take appropriate action.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]