Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
Seoul braces for greater market volatility amid Israel-Hamas war
President Yoon Suk Yeol speaks during a Cabinet meeting held at the presidential office in Seoul, Tuesday. Yonhap
By Anna J. Park
Financial authorities to heighten monitoring
The Korean government has made the necessary preparations to respond to any potential impacts caused by the ongoing military clashes between Israel and Hamas.
During a Cabinet meeting on Tuesday morning, President Yoon Suk Yeol urged heads of related economic ministries to remain vigilant and to respond properly to external factors of instability.
"The government must remain alert in order to respond to external factors of instability, while making every effort to prevent hardships in people's livelihoods from increasing," the president stressed during the meeting.
President Yoon also urged related ministries to strengthen the monitoring of both domestic and international economic and financial circumstances to manage risk factors.
Financial Services Commission (FSC) Chairman Kim Joo-hyun, left, speaks at a meeting during a visit to Japan, Oct. 4. Courtesy of FSC
In response, the Financial Services Commission (FSC), the country's top financial regulator, has vowed to continue to closely monitor for any signs of market turbulence due to the intensification of the war between Israel and Hamas.
FSC Chairman Kim Joo-hyun presided over an emergency meeting on Tuesday, urging the financial authorities, including the FSC and the Financial Supervisory Service (FSS), to closely monitor capital flows in the stock, bond and short-term funds markets, as well as financial companies' foreign currency liquidity situation.
"While the short-term impact of the military clash on the global financial market appears to be limited, the situation could be prolonged further or it may spread with the participation of neighboring countries," the FSC chief said during the meeting, calling on the related agencies to look closely into local financial markets' fund flows and the liquidity situation.
He also emphasized that market participants do not need to be excessively concerned, pointing to past cases of regional disputes in the Middle East. Kim explained that their impact on international oil prices and the global financial market had been limited, when such disputes were not prolonged.
So as to maintain heightened vigilance, the FSC and the FSS aim to closely follow developments on the situation, while bolstering monitoring on local and global financial markets. They will also keep in close communication with the financial sector so as not to miss the right time to make the necessary policy adjustments, if market instability increases.
Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho is at Incheon International Airport, Tuesday, on his way to attend the annual IMF and World Bank meetings in Marrakech, Morocco. Yonhap
Meanwhile, Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho expressed concerns over increased market uncertainty and oil price volatility due to the ongoing military conflict between Israel and Hamas.
"While global financial market movements remain relatively limited at this early stage in the clash, there is a high degree of uncertainty, depending on how the situation evolves in the future," Choo said during a financial market and real economy assessment meeting held prior to his departure to Morocco to attend the annual meetings of the International Monetary Fund and World Bank.
Choo urged related ministries to prepare contingency plans, in addition to maintaining the close monitoring of local and global financial markets and foreign exchange markets. He also pointed to a possibility of heightened volatility in global oil prices, following a spike earlier this week. The deputy prime minister called on the industry ministry along with relevant agencies to prevent disruptions to the local energy supply.
The price of Brent crude, the international standard, rose to $88.15 per barrel, closing the session at 4.35 percent higher, the highest increase since early April. The KOSPI, Korea's main benchmark index, finished at 2,402.58 points at Tuesday's closing, a 0.26 percent fall from the previous session. The won-dollar exchange rate ended at 1,349.5 won per dollar, 0.4 won down from the previous session.