Vice Minister of Economy: "Liquidity is a Double-Edged Sword, Will Actively Manage It"

Abundant Liquidity "Need for Flood Control to Build Dikes to Prevent Overflow into Unnecessary Areas"
Some Measures That Have Served Their Role to Be 'Normalized'... Some Financial Support Likely to Be Withdrawn

[Asia Economy Reporter Jang Sehee] Kim Yong-beom, First Vice Minister of the Ministry of Economy and Finance, stated, "We will actively manage to promote the inflow of market funds into productive sectors while preventing inflows into non-productive sectors such as real estate."

At the macroeconomic and financial meeting held at the Seoul Banking Hall on the 23rd, Vice Minister Kim said, "Abundant liquidity is a double-edged sword." He added, "It is necessary to channel liquidity to where it is truly needed and build levees to prevent overflow into unnecessary areas."

He continued, "Some support measures that have fulfilled their roles will be normalized, but financial support necessary for overcoming COVID-19 damage and economic recovery will be maintained." Accordingly, the government plans to smoothly implement the second financial support program for small business owners, special loans for restricted business sectors, and promptly conclude the extension of maturity and interest repayment deferral measures across all financial sectors.

Regarding the recent domestic economy, he said, "In the stock market, which had been on an upward trend, market volatility has somewhat increased due to inflation concerns and liquidity withdrawal in China." He added, "Recently, daily trading volume and investor deposits have decreased compared to the beginning of the year." From the 1st to the 22nd of this month, the daily trading value of the KOSPI market was 19 trillion won, down from the average of 26.5 trillion won for the entire last month. However, he explained that positive signs such as improvements in production and investment have appeared, supported by the recent recovery in exports.

He stated, "Expectations for improvement in the COVID-19 situation and economic recovery coexist with caution regarding risk factors," and added that the government will strengthen monitoring of domestic and international financial market trends and risk factors.

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