The U.S. Federal Reserve has held interest rates 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, is preparing 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 Ku Yun-cheol convened an expanded macroeconomic financial meeting (F4) with Bank of Korea Governor Lee Hyun-song, Financial Services Commission Chairman Lee Ok-won, and Financial Supervisory Service Chairman Lee Chan-jin to review the Federal Open Market Committee (FOMC) results and trends in financial and foreign exchange markets.
Participants noted that while the Fed has kept interest rates unchanged, the emphasis on price stability in the first FOMC meeting under Chair Jerome Powell suggests a potential shift toward a more restrictive monetary policy.
Additionally, with the Bank of Japan and the European Central Bank also raising interest rates, the government plans to closely monitor the impact of global monetary policy changes on the domestic economy and financial markets. Special attention will be given to vulnerable borrowers and small import businesses that may face increased financial burdens due to rising domestic interest rates, with proactive measures to reduce financial costs and address foreign exchange risks being considered.
The anticipated resolution of peace negotiations between the U.S. and Iran is expected to positively influence stability in financial and foreign exchange markets. Indeed, the KOSPI index has risen above 890 points as foreign selling pressure has eased, and volatility in the bond and foreign exchange markets has somewhat stabilized. However, the government will remain vigilant, monitoring the specifics of the agreement and its implementation, including the reopening 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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