Bank of Korea's Bold Move to Stabilize Financial Markets

In a significant effort to stabilize financial markets following the declaration of martial law on December 4, the Bank of Korea (BOK) has announced the purchase of repurchase agreements (RP) worth 14 trillion won (approximately $9.78 billion) in total. This measure is part of a broader strategy to ensure adequate short-term liquidity and maintain market stability.

The BOK's actions were complemented by an emergency macroeconomic and financial issues meeting (F4 Meeting) held on December 11, involving Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok, BOK Governor Rhee Chang-yong, FSC Chairman Kim Byoung-hwan, and FSS Governor Lee Bok-hyun. The meeting reaffirmed the commitment to stabilizing the financial markets by increasing communication with overseas institutions.

The authorities have also emphasized the importance of closely monitoring financial market conditions and responding decisively to excessive volatility. Deputy Prime Minister Choi stated, "The stock market saw some recovery yesterday, driven by purchases from institutional and foreign investors. However, given the prevailing uncertainties, we will continue to monitor financial and foreign exchange markets closely and respond decisively to excessive volatility to shift market sentiment."

In addition to domestic measures, the MOEF, BOK, FSC, and FSS are actively communicating with international institutions to ensure that recent political developments do not affect South Korea's external credibility. This includes plans for conference calls with major credit rating agencies and meetings with foreign banks and overseas investment banks.