Finance minister vows 'bold, swift steps' against any market volatility amid political chaos

Finance Minister Choi Sang-mok vowed Sunday to take bold steps swiftly, if necessary, against any excessive volatility in the financial and foreign exchange markets amid political chaos following last week's martial law declaration.

Choi made the pledge in a joint statement released by economy-related ministers as South Korea is reeling from the aftermath of President Yoon Suk Yeol's brief declaration of martial law Tuesday.

Yoon survived impeachment Saturday, but the opposition side has vowed to file an impeachment motion again, demanding the immediate suspension of his presidential powers.

"The government will mobilize all resources available in accordance with contingency plans and take bold and swift measures, if necessary," Choi said.

The government and the Bank of Korea are taking preemptive measures to respond to market volatilities, vowing to play a key role as an economic control tower to manage the situation in a stable manner.

Following the overnight turmoil, the Korean won has sunken to a two-year low, while the stock market tumbled on heavy foreign selling.

In an effort to stabilize the markets, the government has vowed to inject "unlimited liquidity" for the time being, and the BOK has begun repo operations for financial institutions.

"We have experienced some confusing incidents in the past, but their impact on the economy was limited," Choi said. "The government will put forth all-out efforts to maintain our sovereign rating under any circumstances."

The government will send envoys to major nations and international institutions to fully explain the current situation and assure that the country maintains strong economic fundamentals, the minister said.

Global rating appraiser S&P Global in April maintained South Korea's long-term sovereign credit rating at "AA," the third-highest level on the company's table, a position it has held since August 2016, when the rating was upgraded by one notch from "AA-."

Choi also asked the National Assembly to swiftly finalize the budget for next year.

Last week, the main opposition Democratic Party of Korea (DPK) railroaded a downsized budget bill in the parliamentary budget committee and had aimed to pass it through a plenary parliamentary session Monday before National Assembly Speaker Woo Won-shik put the plan on hold and urged the rival parties to reach a compromise by next Tuesday.

The current bill proposed by the DPK puts next year's budget at 677.4 trillion won ($485.3 billion), down 4.1 trillion won from the government's initial proposal, while the ruling People Power Party (PPP) insisted on keeping the government's proposal.

The DPK seeks to slash the government's reserve fund and the special activity expenses of the presidential office's secretariat and national security office, as well as those of the prosecution, the state audit agency and the police. (Yonhap)