Vice Minister Ki Jae: "Trump's COVID-19 Diagnosis Increases Volatility in Global Financial Markets"

Kim Yong-beom, the 1st Vice Minister of Strategy and Finance, is delivering opening remarks while presiding over the 'Macroeconomic Financial Meeting' held at the Government Seoul Office on the 6th.

[Asia Economy Reporter Kwangho Lee] Kim Yong-beom, First Vice Minister of Strategy and Finance, said on the 6th, "President Trump's diagnosis with the novel coronavirus infection (COVID-19) will act as a factor increasing volatility in the global financial markets."

On the same day, Vice Minister Kim held a macroeconomic and financial meeting at the Government Seoul Office and stated, "Uncertainty related to the U.S. presidential election is expected to remain at a high level for the time being."

Vice Minister Kim assessed, "Major stock markets in the U.S., Europe, and other countries temporarily declined due to risk-asset aversion and preference for safe assets immediately after the news of President Trump's diagnosis was announced, but the decline narrowed somewhat afterward due to expectations of bipartisan agreement on the U.S. economic stimulus package."

He continued, "In the case of U.S. Treasury bonds, a representative safe asset, despite the increased uncertainty, expectations of an expanded supply of Treasury bonds were reflected, causing Treasury yields to rise instead," and evaluated, "The CDS premiums of Korea and major countries also rose slightly, indicating that the short-term market shock was relatively limited."

He added, "Market participants analyze that the impact of the single news of President Trump's diagnosis on the domestic financial market is limited, but they agree that, given the increased external uncertainties surrounding our financial market, attention should be paid to the possibility of increased market volatility."

Vice Minister Kim emphasized, "The survival strategy of our economy in this era of uncertainty is to wisely cope with uncertainty," and stated, "The government will closely monitor risk factors surrounding our economy and financial markets in cooperation with related agencies and will be fully prepared to implement market stabilization measures promptly if necessary."

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