South Korea’s policymakers said on Wednesday they stood ready to take steps to curb any herd behavior in the market and would consider cutting interest rates again if needed.
Bank of Korea Governor Lee Ju-yeol and Finance Minister Hong Nam-Ki told reporters that authorities were closely monitoring markets after volatility spiked in recent days in the wake of a dramatic escalation in the Sino-US trade war.
When asked whether the Bank of Korea could bring forward the timing of another rate cut, Governor Lee Ju-yeol told reporters the BOK could consider doing so, but said “it is not the right time to speak about additional rate cut for now.”
The BOK delivered a surprise rate cut in July as a trade row with Japan added to pressure on the economy already struggling from the broadening fallout of the Sino-U.S. trade dispute.
Washington’s designation of China as a currency manipulator on Monday deepened the anxiety in markets worried about the potential flare-up of a currency war.
“(The authorities) will take pre-emptive and determined market stabilization measures in case of any herd behavior seen in the market,” Hong said in a meeting with policymakers to discuss current financial market volatility.
Hong told reporters it is “unlikely” that South Korea will be designated a currency manipulator, adding that Washington was aware of the basis on which Seoul had conducted past currency interventions.
In early trade, the stock market's benchmark KOSPI .KS11 index bounced in line with global peers as China took steps to stabilize a sliding yuan. The benchmark KOSPI .KS11 stock index and the won inched up 0.1% as of 0136 GMT.