Acting South Korean president orders extra vigilance on US policy uncertainty

Seoul: Acting President Choi Sang-mok called for staying vigilant and maintaining the enhanced market monitoring on Thursday amid growing uncertainties stemming from monetary and external economic policies by the Donald Trump administration.

Choi made the remarks during a macroeconomic meeting meant to assess new policies by the US government and the Federal Reserve’s rate-setting meeting Wednesday (local time), where it kept the benchmark interest rate unchanged following three consecutive rate cuts, reports Yonhap news agency.

“External uncertainties remain high on the new U.S. government’s policy and external policy measures. Each agency needs to remain vigilant and maintain a joint round-the-clock monitoring system of the financial and foreign exchange markets,” Choi said.

“We will hold an investor relations session next month to actively explain our solid economic fundamentals and to hold meetings with global credit rating agencies so as to maintain the sovereign credit rating in a stable manner,” he added.

Bank of Korea Gov. Rhee Chang-yong and the chiefs of the Financial Services Commission and the Financial Supervisory Service attended the meeting and shared the need to closely monitor the market given recent volatilities in the U.S. and major economies.

The stock and foreign exchange markets remained closed on the final day of the extended six-day Lunar New Year holiday Thursday.

Despite Trump’s call for lower policy rates, Fed Chair Jerome Powell told reporters after the latest decision that it does not “need to be in a hurry” to adjust its policy stance, pointing to the resilient economy.

The Fed’s latest rate decision put the gap between the key rates of South Korea and the United States at up to 1.5 percentage points.

Earlier this month, the Bank of Korea (BOK) kept its benchmark interest rate frozen, following the back-to-back rate cuts, in the wake of the weak local currency amid political chaos and uncertainties stemming from the new Trump administration.

All of its six board members voiced a need to keep open the possibility of further rate reductions in the next three months to prop up the economy.

—IANS