The US Federal Reserve's latest decision to start to taper its bond purchases is expected to have limited impacts on the South Korean financial markets as the move was widely anticipated, a senior government official said Thursday.

First Vice Finance Minister Lee Eog-weon said the government plans to take measures to stabilize the market, if needed, as market volatility could increase if global inflation fears persist longer than expected.

At the latest policy meeting, the Federal Reserve on Wednesday (local time) froze the key interest rate steady near zero but said it will start to taper its massive asset purchases later this month amid the economic recovery.

At a news conference, Fed Chair Jerome Powell said the US central bank would be "patient" before hiking the benchmark interest rate.

South Korea's stocks opened more than 1 percent higher Thursday as investors were relieved by expectations that the Fed is not likely to hike the key rate any time soon.

The benchmark stock price index rose 35.37 points, or 1.19 percent, to trade at 3,011.08 as of 9:33 a.m. The Korean currency was trading at 1,177.90 won per the US dollar, up 3.70 won from the previous session.

The government said the outcome of the Fed's meeting met market expectations, but it will keep close tabs on potential market volatility over global inflation risks.

"If global inflation anchors longer than expected, it could cause market uneasiness due to uncertainty about the pace of the global economic recovery, and major economies' monetary policy directions," Lee said at a meeting on macroeconomics.

The Bank of Korea (BOK) said it will pay special attention to the possibility of monetary policy shifts as uncertainty remains high over the pace of the tapering and the timing of a rate hike.

Lee also said the finance ministry will buy back 2 trillion won ($1.7 billion) worth of government bonds Friday in a bid to help ease the bond market.

The country's bond market rattled in recent sessions as the yield of three-year government bonds topped 2 percent for the first time in three years last week amid global inflation risks and uncertainty about the Fed's tapering of stimulus measures.

The return on three-year state bonds added 0.5 basis point to 2.108 percent Monday, the highest since August 2018. Bond prices move inversely to yields.

But bond prices rebounded after the government on Tuesday unveiled a plan to buy back state bonds to ease market volatility.

The BOK is widely expected to raise its key interest rate in November to tame inflation and curb household debt.

South Korea's central bank froze the benchmark rate at 0.75 percent last month after raising it from a record low of 0.5 percent in August. (Yonhap)