'Currency Surge, Stock Market Stumbles'…Finance Vice Minister "Heightened Vigilance, Reviewing Available Countermeasures"

Bang Gi-seon, 1st Vice Minister of Strategy and Finance [Photo by Yonhap News]

[Asia Economy Sejong=Reporter Son Seon-hee] The US consumer price inflation rate for August exceeded market expectations, causing a sharp impact on the financial and foreign exchange markets. The government has judged that market uncertainty is increasing and decided to review related countermeasures.

On the morning of the 14th at around 8:50 a.m., Deputy Minister of Strategy and Finance Bang Gi-seon chaired an unscheduled emergency economic task force (TF) meeting. With macroeconomic and financial departments within the Ministry of Strategy and Finance attending, Deputy Minister Bang diagnosed, "The growing uncertainty regarding the magnitude and pace of interest rate hikes by major countries is increasing volatility in domestic and international financial markets," and emphasized, "While paying attention to global inflation and the schedule for monetary policy normalization, please closely monitor the financial and foreign exchange market situation with heightened vigilance," the ministry reported. Deputy Minister Bang also urged, "Please thoroughly review all available countermeasures to stabilize the market."

The US Consumer Price Index (CPI) for August, announced the previous day (local time), showed an 8.3% increase compared to the same month last year. This exceeded the local market expectation of 8.0%, delivering a shock to the financial markets. On the New York Stock Exchange, major indices plunged simultaneously: the Dow Jones Industrial Average fell by 3.9%, the Standard & Poor's (S&P) 500 index by 4.3%, and the Nasdaq index by 5.2%. This marks the largest drop in US stock prices since June 11, 2020, when the COVID-19 crisis began in earnest.

Additionally, the rise in US Treasury yields and the strengthening of the dollar compounded the situation. As of the 14th, the won-dollar exchange rate surpassed 1,390 won for the first time in 13 years and 5 months. According to the Seoul foreign exchange market, the exchange rate started at 1,393.0 won, up 19.4 won, and shortly after the market opened at 9:01 a.m., it surged to 1,394.8 won.

The Ministry of Strategy and Finance stated, "The previous risk appetite trend is rapidly reversing across the market," and through the emergency TF, reviewed the rapidly volatile trends in domestic and international financial markets and discussed response directions.

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