[US-Iran War] Government Holds Daily Joint Briefings: "Financial Markets Mixed... Close Monitoring Underway"

Lee Hyungil, First Vice Minister of the Ministry of Finance and Economy (center), is attending a briefing on the "Emergency Inter-Ministerial Meeting Related to the Middle East Situation Assessment" on the 2nd at the Joint Briefing Room of the Government Seoul Office in Jongno-gu, Seoul. Photo by Yonhap News

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Lee Hyungil, First Vice Minister of the Ministry of Finance and Economy, assessed on the 2nd that, regarding Middle East risks stemming from the U.S. and Israeli airstrikes on Iran, "Although international oil prices have risen, the increase has moderated compared to the initial market opening, and the impact on the stock and bond markets remains relatively limited."

Vice Minister Lee made these remarks during a results briefing following the "Emergency Inter-Ministerial Meeting for Middle East Situation Assessment," which was chaired by Prime Minister Kim Minseok in the afternoon at the Government Seoul Office.

He commented, "In the international financial markets, the preference for safe-haven assets has expanded, resulting in a weaker trend for Asian currencies and mixed trends in stock prices." He further explained that safe-haven currencies such as the U.S. dollar and Swiss franc strengthened, while Asian currencies including the yuan, yen, and Taiwan dollar weakened.

Regarding the stock market, he added that while Japan’s Nikkei Index declined, the Australian stock market remained flat and the Shanghai Composite Index in China rose, resulting in a mixed pattern overall.

Vice Minister Lee also noted, "The European stock markets, which have just opened, are showing a further widening of declines." He continued, "Given the persistently high uncertainty, we have decided to hold another joint assessment meeting with relevant ministries before the domestic stock market opens on the morning of the 3rd to review the situation."

On the 28th (local time), after an airstrike by Israel and the United States on Iran, Iran launched missiles at Israel in retaliation, and Israeli firefighters are extinguishing vehicle fires at the missile impact site. Photo by Reuters Yonhap News

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He emphasized, "We plan to monitor developments, as well as the impact on domestic financial markets and the real economy, around the clock through the Joint Emergency Response Team," and added, "If any abnormal signs are detected, we will respond swiftly in close cooperation with relevant agencies according to the contingency plan tailored to each scenario."

When asked about the potential impact on the financial markets going forward, he replied, "It depends on how prolonged and sustained the situation becomes," and added, "Since it is difficult to make easy predictions, we will continue daily monitoring and take necessary measures as needed."

Regarding the damage suffered by small and medium-sized enterprises (SMEs), he explained, "We are currently accepting reports of difficulties and damages through the Ministry of SMEs and Startups and the Export Support Center website," adding, "We will provide guidance on reporting damages through the emergency contact network for the Middle East situation, assess the status of damages, and then deliver customized support."

On the possibility of a blockade of the Strait of Hormuz and the state of logistics, he said, "We have recommended by official letter to shipping associations and others to refrain from operating in Middle East waters, and have instructed ships entering the Strait of Hormuz to stand by and to undertake safety measures." He added, "So far, it has been confirmed that there are no South Korean ships currently passing through the Strait of Hormuz."

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