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South Korea ready to take stabilisation steps after Fed meeting
[SEOUL] South Korea's central bank said on Monday it would hold a meeting after this week's Federal Reserve interest rate decision and stood ready to implement market stabilisation measures if necessary, as per its usual practice following Fed meetings.
The US Fed is widely expected to raise interest rates for the first time in nearly a decade this week.
The Bank of Korea (BOK) said in an emailed statement to media that it would undertake round-the-clock monitoring of global markets during and after the meeting, due to take place Dec 15-16. "If we feel that volatility in financial and foreign exchange markets are overdone, we will seek market stabilising measures after discussions with authorities," the central bank said in the statement.
South Korea's central bank usually holds meetings chaired by its deputy governor after Fed policy meetings to assess the effects on global financial markets and to decide what measures to take if market volatility spikes.
The BOK said it held a meeting earlier on Monday to observe the financial situation both inside and outside the country ahead of the Fed meeting.
Economists and policymakers have said Asia's fourth-largest economy is unlikely to see a major capital outflow from a Fed rate hike given the strong economic fundamentals, which include massive foreign exchange reserves and a current account surplus.
However, local authorities said they would remain highly vigilant for any shocks that may spill over from other emerging markets if US interest rates are raised.