Amid political turmoil, the Bank of Korea said it will enhance short-term liquidity and deploy measures to stabilize the foreign exchange market.
The Bank of Korea sign is displayed atop the central bank headquarters building in Seoul, South Korea, on Thursday, August 16, 2018. The Bank of Korea raised interest rates in second straight meeting on Thursday to ease consumer inflation from 13-year high and further raise forecasts of prices rising to the highest level since 2008.
Jean Chung | Bloomberg | Getty Images
The Bank of Korea said on Wednesday it will boost short-term liquidity and deploy measures to stabilize the foreign exchange market when necessary, after South Korean President Yoon Suk Yeol suddenly lifted the proclamation. Martial law overnight.
The announcement came after the BOK held an emergency meeting. The central bank said it would also make available any special loans to inject capital into the market if needed.
The central bank is scheduled to convene an extraordinary board meeting around 9 a.m. local time on Wednesday. Last week, BOK cuts benchmark interest rate by 25 basis points in a surprise move.
Around that time, Local news agency Yonhap reported South Korea’s financial regulator said it is ready to allocate 10 trillion won ($7.07 billion) to the stock market stabilization fund at any time.
Late Tuesday night, Yoon declared a state of emergency martial law and mobilized the army. Within hours, the National Assembly voted to repeal the emergency order, forcing Yoon to lift martial law early Wednesday morning. Yoon announced that deployed military units had also been withdrawn.
“In our view, the negative impact on the economy and financial markets is likely to be short-lived due to economic uncertainties. [the] The political and economic environment can be quickly mitigated by a proactive policy response,” Citi analysts said in a note.
South Korean Finance Minister Choi Sang-mok on Wednesday swore to inject unlimited liquidity into financial markets, if necessary to stabilize it.
Korean stocks undergone significant changes in the US on Tuesday amid political unrest in South Korea. the iShares MSCI Korea ETF (EWY)which tracks more than 90 large and mid-sized companies in South Korea, fell as much as 7% to a 52-week low before trimming losses to close 1.6% lower.
The Korean stock market begins trading at 9 a.m. KST as usual.
– Reuters contributed to this story
This is a developing story. Check back later for updates.
