Lee Eokwon, Deputy Minister of Economy and Finance, "Concerns over Early US Tapering... Managing Financial Imbalances"

Ministry of Economy and Finance to Hold Macroeconomic and Financial Meeting on the 29th

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] Lee Okwon, First Vice Minister of Strategy and Finance, stated on the 29th regarding the results of the U.S. Federal Open Market Committee (FOMC) meeting that "the results aligned with market expectations, thus not significantly impacting the global market, and the effect on the domestic financial market is expected to be limited."

At the macroeconomic and financial meeting held at the Seoul Bankers' Hall on the morning of the same day, Vice Minister Lee said, "It is an important time to manage more delicately and precisely so that domestic and international risk factors, such as the U.S. tapering (asset purchase reduction) issue and accumulated financial imbalances during crisis response, do not become obstacles to economic recovery."

The U.S. Federal Reserve (Fed) maintained the benchmark interest rate at near zero levels (0?0.25%) and kept the asset purchase scale frozen at over $120 billion per month at the FOMC meeting. Regarding the economic situation, a new evaluation was added that the economy has made progress toward the Fed's goals.

Vice Minister Lee said, "Since the FOMC results largely met market expectations, the impact on the domestic financial market is also expected to be limited," but he also assessed, "Uncertainties continue amid the spread of the Delta virus domestically and internationally and U.S.-China conflicts, and discussions related to tapering persist, with ongoing concerns about early tapering."

He added, "We must continuously be cautious as volatility in domestic and international financial markets can expand at any time during the release of major economic indicators such as inflation and employment in the U.S. and other major countries."

The government plans to thoroughly manage risks by monitoring the future trends of the Delta virus spread, domestic and international economic impacts, and movements of major monetary authorities. Regarding household debt, the government will check compliance with household loan operation plans submitted by each financial institution and take corrective measures if necessary.

In particular, the government intends to strictly manage the recently increasing household loans in the secondary financial sector, monitoring market conditions and responding to prevent market distortions caused by regulatory arbitrage between banks and non-banks.

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