SEOUL, Dec. 19 (Yonhap) -- South Korea's finance minister said Monday the government is keeping close tabs on developments and will take all necessary steps to determine the economic impact of the North Korean leader's death.

"Seoul is checking all changes, carefully analyzing their implications and what appropriate actions are needed to cope with the situation," Finance Minister Bahk Jae-wan said in a press release, after the death of Kim Jong-il was announced at noon Monday.

He added that real-time monitoring of both overseas and domestic economic developments are underway.

The country's top economic policymaker said the government plans to take active steps to deal with any changes that may occur, adding that South Korea will strengthen its cooperative channels with close allies and international credit rating agencies.

The remarks come as both the country's benchmark KOSPI plunged and the foreign exchange market was rocked by the announcement of Kim's death.

The finance ministry will also hold a emergency meeting to be chaired by Bahk at 3 p.m. to examine overall market uncertainties triggered by the event and its implications for South Korea, as it already struggles to cope with global economic woes.

South Korea's economy has been expected to grow 3.8 percent this year, down from 6.2 percent growth tallied in 2010.

Bank of Korea (BOK) Gov. Kim Choong-soo said at a hastily convened meeting following the announcement of Kim's death that every effort must be made to check movements in the stock, bonds and foreign exchange markets and prevent uncertainty from disrupting the economy.

He stressed that the BOK will work with other central banks to exchange market-related information and implement contingency plans in accordance with actions being taken by the government.

This view was echoed by Financial Services Commission (FSC) Chairman Kim Seok-dong who said there is a need to carefully gauge market reaction to the news and implement appropriate actions.

FSC sources speculated the death could raise the overall geopolitical risks on the Korean Peninsula and could adversely affect exchange rates and the bourse. They said this latest development could exert enormous influence on local financial markets.

"There is no need for the market to over-react to the news since all necessary measures are being taken to limit the actual fallout," an FSC official said.