The country's financial watchdog will establish an around-the-clock emergency response system to step up its monitoring of market trends and foreign currency swings amid escalating geopolitical risks involving Ukraine.

The Financial Supervisory Service(FSS) announced that it held an emergency meeting Tuesday morning to inspect the financial market situation as directed by its governor, Jeong Eun-bo, currently on an overseas business trip.

Jeong ordered thorough preparations against uncertainties as diplomatic and military tensions rise between Russia and the West over Ukraine.

In the meeting, deputy governor Lee Chan-woo said a surge in raw material prices and a blow to trade will be inevitable once countries begin to impose financial and export sanctions on Russia.

He mentioned the potential worsening of market volatility due to a confluence of geopolitical risks, normalization in monetary policies and pandemic variables. Lee therefore called for 24-hour monitoring and preemptive measures to prevent short-term market instability.

The Bank of Korea, meanwhile, also held an inspection meeting led by Governor Lee Ju-yeol, who called for vigilance and around-the-clock monitoring, saying market volatility could impact the real economy, such as growth and inflation, on the whole.