Vice Minister Ki Jae: "If false information inducing panic selling is detected, investigation will be requested... Suspicious accounts will also be investigated (Comprehensive)"

Current Status of Suspicious Account Investigations in the Bond Market by FSC and FSS

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] Kim Yong-beom, the 1st Vice Minister of the Ministry of Economy and Finance, said on the 4th, "We will strengthen surveillance on accounts suspected of spreading false information that causes market anxiety and induces panic selling, as well as unfair trading, and request investigations on detected acts."

On the same day, Kim held an expanded macroeconomic and financial meeting at the Government Seoul Office and stated, "We plan to respond strongly and strictly to market disruption activities."

He emphasized, "If financial and foreign exchange market instability expands, we will respond swiftly and decisively. If excessive one-sided swings in the exchange rate due to speculative movements occur, we will firmly implement market stabilization measures."

Regarding the real economy, he diagnosed, "There are concerns about negative impacts on our economy mainly through three channels: a decrease in inbound tourists, contraction in domestic demand, and export decline due to economic downturns in affected countries."

He added, "We have formed and activated response teams by ministry covering all sectors that could be negatively affected, including Chinese local businesses, exports, foreign investment, food and lodging industries, tourism, logistics, small and medium enterprises, small business owners, and regional economies, to inspect the actual situation on the ground."

He explained, "Due to strengthened risk aversion and preference for safe assets, overall volatility is increasing. Stock prices and government bond yields in major countries centered on China are falling, and emerging market currencies such as the yuan are weakening."

He continued, "In the U.S. bond market, an inversion between 3-month and 10-year government bond yields has appeared intraday, and prices of raw materials such as crude oil and copper are also declining." Furthermore, he urged, "At times like these, rather than being trapped in excessive pessimism, we must calmly and rationally review the fundamentals of the financial market and the underlying economy."

The government also plans to respond firmly to stabilize the supply and prices of medical supplies such as masks. He said, "Currently, related ministries and local governments have formed a joint inspection team to closely monitor supply and price situations," and mentioned, "We will not tolerate market disruption acts that hold public safety hostage, such as collusion and hoarding." He expressed, "If unfair acts are detected, we will strictly take administrative and criminal actions according to relevant laws."

Regarding the consumer price trend in January, he evaluated, "Reflecting the rise in oil and agricultural, livestock, and fishery product prices, it rose sharply from 0.4% last year to 1.5%. Domestic real indicators show increasingly clear signs of economic improvement."

He said, "January exports also increased by 4.8% year-on-year on a daily average basis, marking a turnaround to growth for the first time in 14 months since November 2018," and added, "Production, consumption, and facility investment have also continued a triple increase for two consecutive months in November and December." However, he cautioned, "If the novel coronavirus situation does not end early and worsens or prolongs, there is a significant risk that its impact on domestic and international economic activities will become visible, so securing momentum for economic recovery as soon as possible is more important than anything."

After the meeting, he told reporters, "I will check through the Financial Services Commission and the Financial Supervisory Service how many suspicious accounts in the bond market have been narrowed down."

This content was produced with the assistance of AI translation services.