The South Korean government said on Thursday that it will move quickly to stabilize the market following the U.S. Fed’s decision to raise its benchmark interest rates.
 
In a macroeconomic financial meeting attended by representatives of the finance ministry, financial watchdogs and the Bank of Korea, First Strategy and Finance Vice Minister Ko Hyoung-kwon said the government will thoroughly monitor the financial market and take market stability measures at an opportune time.
 
Overnight, the U.S. Federal Reserve raised key interest rates for the second time in three months by 25 basis points, raising the lending cost in the U.S. to the level in South Korea at one and a quarter percent.
 
Citing favorable economic conditions, the Fed forecast one more hike this year, while announcing it will also start cutting bond holdings.
 
Ko said the Fed’s decision was widely expected and has caused no significant market fluctuations, adding the U.S. stock index showed little changes overnight, while the U.S. dollar weakened moderately against other currencies, including the Korean won.
 
Dismissing concerns the narrowing gaps in interest rates between the U.S. and South Korea will influence the South Korean financial markets negatively, Ko said thanks to South Korea’s financial soundness, the possibility of the local market fluctuating is not high.
 
Ko said the government and related agencies will keep the door open to every possibility, vowing to be thoroughly prepared in order to minimize the U.S. rate hike’s negative ramifications on the country.