Government Reviews Impact of U.S. FOMC: "Financial Institutions Have Ample Capacity to Respond Even Amid Crisis Situations Like Oil Prices and Exchange Rates"

Expanded Macroeconomic and Financial Meeting Presided Over by Deputy Prime Minister

Koo Yoon-chul, Deputy Prime Minister and Minister of Strategy and Finance, is taking a commemorative photo ahead of the expanded Macroeconomic and Financial Meeting held on the 30th at the Federation of Banks in Jung-gu, Seoul. From the left: Lee Chan-jin, Financial Supervisory Service Commissioner; Shin Hyun-song, Governor of the Bank of Korea; Deputy Prime Minister Koo; Lee Ok-won, Chairman of the Financial Services Commission. Ministry of Strategy and Finance

Deputy Prime Minister and Minister of Finance and Economy Koo Yoon-chul stated on the 30th, "Even if we assume crisis situations involving key variables such as oil prices and exchange rates, our financial institutions have ample capacity to respond."

Deputy Prime Minister Koo made this remark while presiding over the expanded macroeconomic and financial meeting attended by Shin Hyun-song, Governor of the Bank of Korea, Lee Eok-won, Chairman of the Financial Services Commission, and Lee Chan-jin, Commissioner of the Financial Supervisory Service.

On this day, Deputy Prime Minister Koo and other attendees discussed the key outcomes of the U.S. Federal Open Market Committee (FOMC) meeting, its impact on domestic and international financial and foreign exchange markets, and response strategies.

The FOMC, held overnight, maintained the base interest rate at 3.50–3.75% as expected. However, four members opposed the decision, marking the highest number of dissenting votes since 1992. The statement upgraded the expression related to inflation from "remains somewhat elevated" to "is elevated," and included more direct language stating that the Middle East situation contributes to high uncertainty in the economic outlook.

Attendees assessed the FOMC's decision to hold rates steady, noting, "The U.S. economy is continuing its solid trend, but uncertainty surrounding the future path of interest rates remains due to the situation in the Middle East."

On this day, the won-dollar exchange rate opened at 1,486.5 won, up by 7.5 won, in response to the FOMC results and the outlook for a prolonged war in the Middle East. In the overnight market the previous day, the exchange rate surged, closely following the sharp rise in oil prices, and approached the 1,490 won level.

Overnight, the three major indices on the New York Stock Exchange showed a mixed trend within a stable range. On this day, the KOSPI index started at 6,739.39, up 0.72% from the previous session, and even rose to the 6,750 level during intraday trading.

The participants shared the view that "our economy is continuing to expand its growth even amid the aftermath of the Middle East war, but volatility in the financial and foreign exchange markets persists." They also stated, "We will actively collaborate with financial institutions to ensure thorough preparation for the launch of the 24-hour foreign exchange market and the establishment of the offshore won settlement system, thereby accelerating structural improvements in the foreign exchange and financial markets. At the same time, we will jointly pursue structural innovation in fiscal, public, and regulatory sectors."

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