Korea vows to take steps over financial volatility

South Korea said Tuesday it will take measures to stabilize the financial market, if needed following the latest North Korean missile launch that has further spiked tensions in the region.

The Finance Ministry said it is monitoring financial markets at home and abroad and the South Korea's economy around-the-clock to effectively cope with risks posed by Pyongyang.

The government "will take necessary steps in a timely manner" in case of financial volatility, the ministry said after a joint review meeting with the Bank of Korea and other relevant financial authorities.

The missile launch did not cause serious volatility in the local financial markets, though value of the US dollar has strengthened as investors sought safer assets amid security concerns.
 

The benchmark Korea Composite Stock Price Index shed 5.56 points, or 0.23 percent, to close at 2,364.74, after dipping to as low as 2,332.85 at one point. The local currency closed at 1,126.40 won against the US dollar, down 6.3 won from the previous session's close.

"North Korea's missile launch had a limited impact on foreign exchange markets," said Jeon Seung-ji, an analyst at Samsung Futures.

Earlier this month, BOK Gov. Lee Ju-yeol and Finance Minister Kim Dong-yeon vowed to take necessary measures to stabilize financial markets, though they declined to elaborate on details.

South Korea, with its relatively small open market, heavily depends on exports and foreign capital investment to generate growth. Because of this, the country can be vulnerable to external shocks.

Reflecting the seriousness of the situation, and how Seoul views the latest development, the country's Air Force used its F-15K to stage a live-bomb drill in the country's eastern area.

US President Donald Trump and Japanese Prime Minister Shinzo Abe agreed Tuesday to increase pressure on North Korea in response to its latest missile launch, according to Reuters.

Last weekend, North Korea also fired off three short-range ballistic missiles, although one blew up immediately after launch. (Yonhap)