Korea set to tackle possible financial turbulence

Korea set to tackle possible financial turbulence

South Korea’s finance ministry said Thursday that the local financial market is apparently in a stable mode on the first business day after a long holiday, despite negative external issues.

North Korea fired a long-range rocket carrying what it claims is a satellite Sunday, further escalating already high tensions on the Korean Peninsula. In response, the South Korean government on Wednesday decided to shut down the inter-Korean industrial complex.

The Ministry of Strategy and Finance held a market review meeting presided over by Deputy Minister Lee Chan-woo to check the market conditions and cushion any fallout from global risks, including a plunge in the Japanese stock market.

“South Korea’s credit default swap (CDS) premium started to move down in the global market, and the won-dollar rate has been stable,” the ministry said in a release.

The CDS premium, which measures a country’s credit risks, peaked at 76 on Tuesday but fell to 74 on Wednesday in New York, according to the ministry.

Investors were relieved as U.S. Fed Chair Janet Yellen hinted at a slower interest rate increase in the future.

The benchmark KOSPI, however, tumbled more than 2 percent on Thursday, the first trading session in five days, while the local currency gained ground against the U.S. dollar.The South Korean stock and foreign currency markets were closed until Wednesday for the Lunar New Year’s holiday.

The ministry said it will hold the review meeting every day until the markets stabilize.

Source:  http://www.koreaherald.com/view.php?ud=20160211000717

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