South Korea on Friday reaffirmed its determination to move swiftly and resolutely to deal with any financial market turmoil as the recent U.S. rate hike and the domestic political issues weigh heavily on Asia's fourth-largest economy.

The government held an emergency economic response team meeting chaired by Vice Finance Minister Choi Sang-mok in Seoul to review the current economic situations and discuss ways to deal with challenges that the South Korean economy is now facing, according to the Ministry of Strategy and Finance.

"The government will strengthen around-the-clock monitoring of the financial market and the real economy," said the finance ministry in a release. "It will take swift and resolute action against any abnormality in the financial market."

On Thursday, the U.S. Federal Reserve raised its key interest rate by a quarter of a percentage point to a range of 0.5 percent to 0.75 percent, citing better job data and potential higher growth of inflation.

It also signaled three rate hikes in 2017, meaning that the world's largest economy has entered monetary tightening in earnest.

At the same time, the recent political turbulence sparked by the impeachment of President Park Geun-hye is intensifying economic uncertainties in South Korea, which is struggling with faltering exports and flaccid domestic demand.

In order to tackle the economic downturn, the government will focus on spending some 70 percent of the 400 trillion-won budget earmarked for 2017 in the first six months and consider drawing up a supplementary budget to pump-prime the economy.

"The government is ready to execute next year's budget at the very beginning of 2017," the ministry said. "The government will work on boosting private consumption, improving income of the needy and handling the low birthrate." (Yonhap)