SEOUL (AFP) – South Korea said it would provide “sufficient liquidity” to support its financial markets yesterday after the country was rocked by President Yoon Suk Yeol’s brief imposition of martial law overnight.
Equities sank more than two per cent in Seoul and the won initially plunged to a two-year low against the dollar after the dramatic move, which stunned traders already concerned about the state of Asia’s number-three economy.
In a bid to limit the fallout from the crisis, the country’s Central Bank and Finance Ministry moved to reassure markets.
“As announced together with the government, it has been decided to temporarily supply sufficient liquidity until the financial and foreign exchange markets stabilise,” the Bank of Korea said.
It added that “the range of securities eligible for (repo) transactions and the target institutions will be expanded”. Deputy Prime Minister Choi Sang-mok, who is also the Minister of Economy and Finance, said financial authorities will keep international partners informed about developments.
“In order to ease concerns about our economic situation, we will closely communicate with international credit rating agencies, major countries such as the United States, domestic economic organisations and financial markets, and share the situation,” he said.
“In addition, we will operate a 24-hour economic and financial situation inspection task force to operate a real-time monitoring system to prevent a real-time economic shock, and we will thoroughly monitor with relevant organisations to prevent any disruptions in exports.”
Yoon said he had made the decision, which took Seoul’s global allies by off guard, “to safeguard a liberal South Korea from the threats posed by North Korea’s forces and to eliminate anti-state elements plundering people’s freedom and happiness”.
