South Korea President Moon Jae-in said on Tuesday the government should make an all-out effort to cushion the economic impact from China's coronavrius outbreak, boosting expectations of further monetary easing.
"(The government) shouldn't quibble over whether anything is unprecedented or not, rather, we should take every possible measure we can think of on the table to deploy them," Moon said in a cabinet meeting.
The fast-spreading coronavirus has disrupted world supply chains and business activity in a blow to global growth and demand for South Korean goods.
Moon said the economy is in an emergency situation and requires stimulus to lift domestic demand.
South Korea's 3-year treasury bond futures sharply extended gains after Moons' remarks as investors speculated stimulus measures being rolled out could include an interest rate cut when the Bank of Korea meets on February 27.
In January, the BOK voted 5-2 to keep its benchmark rate steady at 1.25%, standing pat for a second meeting following two reductions in July and October last year.
Moon's comments could add pressure on the central bank to back government policies in the run up to the April 15 general election. In a January survey by Reuters, 14 of 33 analysts saw one more BOK cut through 2020 while 15 saw no change.
In 2015, South Korea drew up a supplementary budget to help cushion the economy from the effects of an outbreak of Middle East Respiratory Syndrome (MERS).
Meanwhile, Singapore on Tuesday announced financial packages worth around $4.5 billion to help contain the coronavirus outbreak in the city-state and weather its economic impact.
Delivering his annual budget speech, Finance Minister Heng Swee Keat also said a planned hike in goods and services tax would not take place in 2021 given the current state of the economy which recorded its lowest growth in a decade last year.
Singapore has already cut its 2020 growth forecasts due to an expected economic blow from the new coronavirus outbreak and flagged the chance of a recession this year.
"Just as the global economy was beginning to recover, the coronavirus...outbreak hit us," said Heng. "The outbreak will certainly impact our economy...Our first concern is to protect you and your families."
The schemes involve an S$800 million ($575 million) package to fight and contain the disease, mainly through additional healthcare funding, and a further S$5.6 billion ($4 billion) in measures to help manage its impact on businesses and jobs.
The economic packages include support for businesses to manage wage bills, corporate income tax rebates and specific schemes to help firms in the hard-hit tourism and aviation sectors.
The Southeast Asian city-state has reported 77 cases of the virus to date, one of the highest tallies outside China where it has claimed over 1,800 lives.
The economic fallout from the epidemic spread to US technology titan Apple, which warned of iPhone shortages and lower than expected revenue, while South Korea's president called the situation in his country an economic emergency.