Finance minister vows contingency plans against global financial market uncertainty
Finance Minister Choi Sang-mok, center, speaks during a macroeconomic meeting in Seoul on Aug. 1, which was also attended by Bank of Korea Gov. Rhee Chang-yong, left. Yonhap
Finance Minister Choi Sang-mok on Thursday vowed to beef up monitoring of the global financial market and devise contingency plans to better respond to uncertainties regarding interest rates in the United States and other nations.
Choi made the remarks during a macroeconomic meeting meant to assess the Federal Reserve's rate-setting meeting Wednesday (U.S. time), where it kept the benchmark interest rate intact at between 5.25-5.5 percent for an eighth straight time.
But Fed Chair Jerome Powell said that "a reduction of policy rate could be on the table at the September meeting," noting some progress on the path toward the inflation target of 2 percent.
"Uncertainties linger over when and how much the U.S. will cut interest rates. The government will remain vigilant and maintain close coordination among institutions concerned for proper responses," Choi said.
The Fed's latest freeze also kept the gap between the key rates of South Korea and the U.S. at up to 2 percentage points.
The domestic financial market remains relatively stable, but there are chances of greater volatility over the Middle East crisis and the U.S. elections, Choi said, pledging responses in accordance with contingency plans, if needed.
Policy focus will also be on such risk factors as household debts and real estate project financing, the minister said. (Yonhap)