South Korea's central bank checked on the international financial market response to North Korea's demolition of the inter-Korean liaison office, and its impact on the domestic financial and exchange markets.

The Bank of Korea(BOK) on Wednesday assessed that while the Korean won slightly weakened, the impact was limited with both additional interest on the foreign exchange stabilization bond and the credit default swap(CDS) premium reduced.

The BOK plans to closely monitor the markets amid possible volatility from concerns over a second wave in the COVID-19 pandemic and the North Korea risk.

Finance Minister Hong Nam-ki led a meeting where officials confirmed that the CDS premium, a barometer for the country's default risk, had recovered overnight and that the won further weakened against the U.S. dollar.

This, however, was assessed largely due to the dollar strengthening amid favorable economic indices.