The head of Korea's central bank on Monday said the bank is prepared to ensure ample market liquidity to minimize market uncertainty stemming from Britain's unprecedented vote to leave the European Union.
Bank of Korea Gov. Lee Ju-yeol also insisted there is no need to react too sensitively to what he called "short-term" changes in the market.
(Yonhap)
"In the case of our country, which is relatively more open, not only its financial market but also its real economy may be exposed to a negative impact from Brexit, but I believe there is no need for economic players to react too sensitively to short-term changes," Lee said at an emergency meeting with senior BOK officials.
The top central banker returned home earlier in the day after cutting short his trip to Basel, Switzerland, for the annual general assembly of the Bank for International Settlements.
"Conditions in our financial market and those of other Asian countries today indicate that price fluctuations have already eased from those of last week, showing signs of easing concerns," Lee added.
Lee, however, said the BOK will maintain a high level of market liquidity, amid possible signs of capital outflows.
Shortly after Britain's vote Friday, the U.S. greenback shot up 2.52 percent against the Korean won, closing at 1,179.90 won per dollar.
The appreciation of the U.S. dollar was partly attributed to the local investors' growing preference for safer assets but also a possible departure of foreign investors from the local stock market.
The U.S. dollar again gained ground against the local currency Monday, closing at 1,182.30 won per dollar, up 2.4 won from the previous session's close. "The BOK will work to minimize the (negative) impact Brexit will have on the local financial market and the economy," the BOK chief said.
The BOK meeting followed an earlier meeting hosted by the Financial Services Commission where the head of the top financial regulator vowed all-out efforts to counter any negative impact from Britain's exit from the EU.
"There still exists a possibility that volatility in the global financial market may further expand due to possible departures of other countries from the EU and various other factors that might emerge in the process of the market shifting to a new balance following Brexit," Yim Jong-yong told the meeting, attended by key financial officials, including the heads of the Financial Supervisory Service, the Korea Federation of Banks and the Korea Financial Investment Association. (Yonhap)