The U.S. Federal Reserve has kept its benchmark interest rate steady, but experts warn that future monetary policy may tighten more than expected. The South Korean government, along with the Bank of Korea and financial authorities, plans to develop support measures to alleviate the burden on vulnerable groups due to rising market interest rates.
On June 18, Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol convened an expanded macroeconomic and financial meeting (F4) with Bank of Korea Governor Lee Hyun-sung, Financial Services Commission Chairman Lee Ok-won, and Financial Supervisory Service Chairman Lee Chan-jin at the Government Seoul Building. They reviewed the outcomes of the Federal Open Market Committee (FOMC) meeting and assessed trends in the financial and foreign exchange markets.
Participants noted that while the Fed has maintained its interest rate, the emphasis on inflation stability in the first FOMC meeting under Chair Jerome Powell suggests a potential shift toward a more contractionary monetary policy.
Additionally, with major central banks like the Bank of Japan and the European Central Bank also raising interest rates, the South Korean government will closely monitor the impacts of global monetary policy changes on the domestic economy and financial markets. They plan to proactively review measures to mitigate financial costs and address foreign exchange risks for vulnerable borrowers and small import businesses that may face increased burdens due to rising domestic interest rates.
The resolution of peace negotiations between the U.S. and Iran is expected to positively influence stability in the financial and foreign exchange markets. In fact, the KOSPI index has surpassed the 890-point mark as foreign selling pressure has eased, and volatility in the bond and foreign exchange markets has somewhat stabilized. However, authorities will remain vigilant, monitoring the specifics of the agreement and its implementation regarding the opening of the Strait of Hormuz and the stabilization of international oil prices.
The government plans to activate an integrated risk management system that encompasses not only the stock, bond, and foreign exchange markets but also the real estate market, systematically assessing sector-specific risk factors and their ripple effects.
* This article has been translated by AI.
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