N.K. provocation may stir up volatility in S. Korean market: finance ministry
SEJONG-- South Korea's finance ministry said Friday that it will take swift and firm action as the heightening geopolitical tension sparked by the latest North Korean provocations may expand market volatility.
Jitters over North Korea's announcement to launch ballistic missiles toward the U.S. Pacific territory of Guam sent investors to seek safer assets in the South Korean financial market.
The Korean won lost ground by 1.8 percent against the U.S. dollar over the recent three days, while the credit default swaps (CDS) premium also rose 66 basis points, marking the highest since April last year.
On Friday, the Ministry of Strategy and Finance, the Financial Services Commission, the Bank of Korea and relevant agencies held an emergency meeting in Seoul to discuss ways to deal with the potential impact of the latest North Korean act of aggression.
"A small event can make the market fluctuate to a large extent amid rising uncertainties over the upcoming developments," the finance ministry said in a release. "The government will strengthen around-the-clock monitoring of the market and take immediate action in accordance with its established contingency plan."
The benchmark KOSPI started 36.41 points, or 1.54 percent, lower at 2,323.06 points at 9:00 a.m., with the Korean won declining 3.2 won to 1,145 won against the U.S. dollar.
Source: Yonhap News Agency