The Bank of Korea’s logo hangs atop the Bank of Korea’s central bank headquarters building in Seoul, South Korea, Thursday, August 16, 2018. Prices are expected to rise to their highest levels since 2008.
Joan Bell | Bloomberg | Getty Images
The Bank of Korea said on Wednesday South Korea will increase short-term liquidity and take steps as needed to stabilize the foreign exchange market after President Yoon Suk Yeol suddenly lifted martial law overnight.
The news came shortly after the Bank of Korea held an emergency board meeting at around 9 a.m. local time. In a statement issued after the meeting, The central bank said it would also provide any special loans if needed to inject funds into the market.
“As announced jointly with the government, we will provide sufficient liquidity for a limited time until financial and foreign exchange markets stabilize,” the Bank of Korea said. Reaffirm commitments made Earlier in the day, South Korean Finance Minister Choi Sang-mok said.
Local news agency Yonhap reported Earlier on Wednesday, South Korea’s financial regulator said it was ready to allocate 10 trillion won ($7.07 billion) to the stock market stabilization fund at any time.
Late Tuesday night, Yin declared emergency martial law and mobilized the military. Within hours, the National Assembly voted to overturn the emergency order, forcing Yun to lift martial law early Wednesday morning. Yin announced at the time that deployed military units had also been withdrawn.
Citi analysts said in the report: “We believe the negative impact on the economy and financial markets is likely to be short-lived, as uncertainty in the political and economic environment is likely to quickly ease on the back of a positive policy response. ”
South Korean stocks saw sharp swings in the U.S. on Tuesday amid political turmoil in the country. The iShares MSCI Korea ETF (EWY), which tracks more than 90 large and mid-cap companies in South Korea, tumbled 7% to hit a 52-week low before ending down 1.6%.
Last week, the Bank of Korea unexpectedly cut its benchmark interest rate by 25 basis points.
The Korean stock market started trading at 9 a.m. (Korean Standard Time) as usual.
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