The Bank of Korea alerted Tuesday of “increased volatility” as worldwide markets brace for future walkings from the U.S. Federal Reserve.
“There is a high chance of increased volatility whenever the U.S. Federal Reserve makes a policy rate decision and the global finance and foreign exchange market has to digest it,” BOK Governor Rhee Chang- yong, according to a text from the reserve bank.
Rhee stated Powell’s talk about the U.S. reserve bank’s strategies to continue treking rates in September were “not much different” from South Korea’s position throughout the reserve bank’s August conference.
The Bank of Korea will not be moving its existing financial position, however it will “closely monitor the Fed’s decision and its impact at home and abroad,” Rhee stated.
At Jackson Hole recently, Rhee informed Reuters it was not likely for the BOK to end its rate walking cycle earlier than the Fed.
“We are now independent from government, but we are not independent from the Fed,” Rhee informedReuters “So if the Fed continues to increase the interest rate, it will have a depreciation pressure for our currency.” Commenting on raising rate of interest, Rhee stated at that time: “Whether we can end earlier – I don’t think so.”
South Korean stocks saw a rebound on Tuesday, a day after the standard Kospi tipped over 2% and the Korean won reached the weakest level in more than 13 years on Monday.
First costs cut in 13 years
South Korea’s federal government likewise revealed Tuesday that it will be cutting yearly federal government costs for the very first time in more than a years.
The financing ministry launched its very first budget plan proposition of 639 trillion won ($473 billion) for 2023– it was 6% smaller sized than this year’s costs after 2 additional spending plans and would mark the very first yearly decrease considering that 2010 if there disappear supplemental spending plans revealed.
In a declaration, the financing ministry stated the country is revealing a “total shift” in its financial position “from expansionary to sound financing.”
