Finance Minister and Deputy Prime Minister Koo Yun-cheol convened a joint meeting in Seoul with Financial Services Commission Chairman Lee Eog-weon, Financial Supervisory Service Governor Lee Chan-jin and Bank of Korea Deputy Governor Park Jong-woo.
Officials said long-term yields in major economies had risen amid Middle East uncertainty, increased sovereign issuance and heavier corporate bond sales by global artificial intelligence companies, with the pressure concentrated at the ultra-long end of the curve.
The government will monitor the impact on South Korea's bond market, corporate and household borrowing costs and the broader economy while preparing measures to ease financial burdens on small businesses and other vulnerable borrowers.
The planned package will include expanded debt restructuring for distressed small businesses and individuals as well as additional financing for small and medium-sized companies and vulnerable borrowers.
"Long-term government bond yields in the U.S., Japan and Europe have risen to their highest levels in decades," Koo said, adding that Korea had also seen yields climb at ultra-long maturities.
Officials also reviewed the won's sharp recent appreciation. The currency returned to the 1,300-per-dollar range on Aug. 19 for the first time in 11 months, after weakening beyond 1,550 in early July, helped by a record current-account surplus and easing foreign investor equity rebalancing, the ministry said.
The won traded at 1,390 per dollar on Aug. 19 and 1,393 on Thursday, compared with 1,529 in the first week of July.
Authorities said they would remain alert as geopolitical tensions in the Middle East and monetary policy in major economies continued to pose risks in both directions for the currency.
The government meanwhile said South Korea's external financial position remained sound despite a sharp decline in net international investment assets in the second quarter.
Officials attributed the drop largely to higher valuations of South Korean equities held by overseas investors, while net external claims increased by $2.3 billion to $367.8 billion and the current-account surplus reached a record $191 billion in the first half.
Household credit has exceeded 2,000 trillion won, but the household debt-to-GDP ratio fell to 85.3 percent in the first quarter from 89.1 percent a year earlier, according to the ministry.
Officials said they would continue managing household debt risks while ensuring that genuine borrowers do not face unnecessary financing constraints.
Koo said authorities would maintain an integrated monitoring framework covering financial, foreign-exchange, government bond and property markets and respond promptly if risks intensified.
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