Finance Minister Yoo Il-ho on Sunday pledged to implement "aggressive stabilization measures" to address any market unrest caused by Britain's recent decision to leave the European Union.
Yoo made the remark at an emergency meeting in Seoul to discuss ways to cope with potential financial volatility in light of the Brexit vote. The meeting was also attended by Vice Finance Minister Choi Sang-mok, Bank of Korea Senior Deputy Governor Jang Byung-hwa and HSBC Korea CEO Jung Eun-young, among other government and industry officials.
"The government will take into account every scenario as we prepare our countermeasures," Yoo said. "With more than US$370 billion in our foreign currency reserves, our economy is more than capable of responding to (post-Brexit crisis). We will continue to bolster such capabilities by stabilizing liquidity."
Yoo also said he will seek to strengthen communication with market participants.
"At times of global economic crises in the past, investors from South Korea and overseas have expressed concerns about additional problems here, despite our strong fundamentals," the minister noted. "To prevent unnecessary misunderstandings, I will pay even greater attention to foreign investors and credit rating agencies."
Yoo said international cooperation will also be important to deal with market uncertainties. He pointed out that European Central Bank and G7 promptly came up with market stabilizing schemes, and said South Korea will seek to contribute to ensuring global financial stability through G20, among other international channels.
He defined problems caused by the British decision as "mid- to long-term," adding the government will keep a close tab on Brexit's impact on the world economy and trade and prepare countermeasures accordingly.
"The current crisis is unfolding differently than several financial crises in the past, and it's very difficult to predict how it's going to go from here," Yoo said. "It's worrisome that Brexit hit the global economy when it's very vulnerable. The financial market shocks and decrease in trade caused by Brexit could hamper global economic recovery."
Asked about potential currency swaps after the meeting, Yoo said, "We engage in a great deal of international cooperation, but we will be careful about (currency swaps) before making our decision."
A currency swap is an arrangement between two countries to exchange one currency with another at a specific rate of exchange, in a bid to use the powerful foreign currency to soothe the volatility in the currency market.
Yoo reiterated that he was concerned about mid- to long-term impact of Brexit and said, "It's difficult to determine the extent of the impact in just a day or two." (Yonhap)
Yoo made the remark at an emergency meeting in Seoul to discuss ways to cope with potential financial volatility in light of the Brexit vote. The meeting was also attended by Vice Finance Minister Choi Sang-mok, Bank of Korea Senior Deputy Governor Jang Byung-hwa and HSBC Korea CEO Jung Eun-young, among other government and industry officials.
"The government will take into account every scenario as we prepare our countermeasures," Yoo said. "With more than US$370 billion in our foreign currency reserves, our economy is more than capable of responding to (post-Brexit crisis). We will continue to bolster such capabilities by stabilizing liquidity."
Yoo also said he will seek to strengthen communication with market participants.
"At times of global economic crises in the past, investors from South Korea and overseas have expressed concerns about additional problems here, despite our strong fundamentals," the minister noted. "To prevent unnecessary misunderstandings, I will pay even greater attention to foreign investors and credit rating agencies."
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Yoo said international cooperation will also be important to deal with market uncertainties. He pointed out that European Central Bank and G7 promptly came up with market stabilizing schemes, and said South Korea will seek to contribute to ensuring global financial stability through G20, among other international channels.
He defined problems caused by the British decision as "mid- to long-term," adding the government will keep a close tab on Brexit's impact on the world economy and trade and prepare countermeasures accordingly.
"The current crisis is unfolding differently than several financial crises in the past, and it's very difficult to predict how it's going to go from here," Yoo said. "It's worrisome that Brexit hit the global economy when it's very vulnerable. The financial market shocks and decrease in trade caused by Brexit could hamper global economic recovery."
Asked about potential currency swaps after the meeting, Yoo said, "We engage in a great deal of international cooperation, but we will be careful about (currency swaps) before making our decision."
A currency swap is an arrangement between two countries to exchange one currency with another at a specific rate of exchange, in a bid to use the powerful foreign currency to soothe the volatility in the currency market.
Yoo reiterated that he was concerned about mid- to long-term impact of Brexit and said, "It's difficult to determine the extent of the impact in just a day or two." (Yonhap)
