Bank of Korea Gov. Rhee Chang-yong, center, bangs the gavel to open a Monetary Policy Committee meeting at the central bank in Seoul, Nov. 28. Joint Press Corps
The Bank of Korea (BOK) chief said Wednesday that Korea's financial market is under normal operation despite turmoil after President Yoon Suk Yeol's short-lived martial law declaration.
BOK Gov. Rhee Chang-yong made the remarks during his appearance on Bloomberg TV less than a day after Yoon declared martial law late Tuesday, which was lifted by the National Assembly a few hours later.
Rhee said the central bank has been focusing on providing "ample liquidity" to the market to minimize the impact of political disturbance, noting South Korea has strong market fundamentals and a mature democracy to overcome the crisis.
The BOK has no plan to readjust its growth outlook for the economy over the incident, he added. It earlier forecast South Korea's economy to expand 1.9 percent next year.
Earlier in the day, the BOK's monetary policy board held an extraordinary session to discuss ways of stabilizing the financial and foreign exchange markets through repurchase agreements and other means.
"The BOK will provide ample liquidity temporarily until the financial and foreign exchange markets become stable. Starting Wednesday, we will boost the supply of short-term liquidity by buying repurchase agreements," the bank said in a release.
A repurchase agreement is a deal whereby one party sells the other a security at a specified price with a commitment to buy the security back at a later date.
The board will also be prepared to provide loans swiftly, when needed, the BOK said, vowing to implement "various other measures" to stabilize the exchange rate.
"Given the solid fundamentals and strong financial soundness of our economy, market sentiment is expected to be stabilized. But the board will closely monitor the market situation and actively take additional measures," the BOK said in a release.
Following the imposition of martial law Tuesday, financial authorities have pledged to mobilize "all possible market stabilization measures," including "the injection of unlimited liquidity."
Yoon declared emergency martial law in a surprise late-night address on Tuesday, accusing the opposition side of conducting "anti-state activities."
He lifted the military rule only hours later after the National Assembly voted 190-0 to reject it in the wee hours of Wednesday.
The opposition parties later submitted a motion to impeach Yoon.
The foreign exchange market has shown high volatility following the martial law imposition, with the won plunging to its lowest level in more than two years during offshore trading overnight.
The Korean won traded at 1,410.1 won against the U.S. dollar at 3:30 p.m., down 7.2 won from the previous session. (Yonhap)
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