Government Reviews Domestic Market Impact of US Credit Rating Downgrade

Bang Gi-seon, 1st Vice Minister, Holds Market Situation Review Meeting

Bang Gi-seon, Vice Minister of Strategy and Finance, is delivering opening remarks at the Emergency Economic Vice Ministers' Meeting held on the 7th at the Government Seoul Office in Jongno-gu, Seoul. Photo by Dongju Yoon doso7@

Global credit rating agency Fitch downgraded the United States' credit rating (AAA → AA+), prompting related agencies such as the Ministry of Economy and Finance and the Bank of Korea to assess the market impact.

According to the Ministry of Economy and Finance on the 2nd, the government and related agencies including the Bank of Korea held a working-level meeting chaired by the 1st Vice Minister of the Ministry of Economy and Finance to examine the market impact of the U.S. credit rating downgrade. Participants included the Ministry of Economy and Finance, Bank of Korea, Financial Services Commission, Financial Supervisory Service, and the International Finance Center.

Bang Gi-seon, the 1st Vice Minister of the Ministry of Economy and Finance, held a market situation monitoring meeting involving departments responsible for finance, foreign exchange, and bond markets within the Ministry of Economy and Finance, instructing to strengthen market monitoring with particular caution against increased volatility in domestic and international financial markets.

Vice Minister Bang stated, “So far, the market expects the impact to be less significant than when S&P downgraded the U.S. credit rating (AAA → AA+) in 2011,” adding, “Since there remains a possibility of increased volatility in domestic and international markets as the preference for safe assets intensifies, we will maintain a close cooperative system among related agencies.” He also said, “If necessary, we will promptly implement measures to stabilize the market.”

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