Seoul: South Korean authorities have shifted into an emergency response mode to address market volatility triggered by the ongoing crisis in the Middle East. The Bank of Korea (BOK) convened a special task force meeting on Tuesday to evaluate the repercussions of the recent conflict involving the United States and Israel against Iran on financial markets and to formulate response strategies for potential market disruptions.

According to Yonhap News Agency, the meeting was led by BOK Governor Rhee Chang-yong, where officials examined the effects of the joint military operation by the U.S. and Israel over the weekend, which resulted in the death of Iran's Supreme Leader Ayatollah Ali Khamenei. The discussions centered on the implications for both domestic and global markets, along with the economy, focusing on crafting response plans under different scenarios.

The BOK emphasized its commitment to closely monitoring market developments by establishing a 24/7 surveillance system in collaboration with its overseas offices. The central bank expressed readiness to implement necessary actions if required.

The conflict has escalated regionally, with Israeli forces targeting areas in Lebanon following Hezbollah's attacks on Israel. Meanwhile, Iran has continued retaliatory measures against Gulf states hosting U.S. military bases, as reported by foreign media.

The Korea Composite Stock Price Index (KOSPI) experienced a historic drop, plummeting 452.22 points, or 7.24 percent, to close at 5,791.91 on Tuesday, driven by significant foreign selling. This marked the largest single-day point decline in history. Additionally, the local currency depreciated to a one-month low of 1,466.1 per dollar.

In response to the heightened volatility, the Financial Supervisory Service (FSS) has activated an emergency team to monitor the markets and implement policy measures. The agency has also established a hotline connecting overseas offices with local financial subsidiaries, as stated by its officials. Furthermore, they have expanded reporting channels for small and mid-sized companies and households affected by market instability, while fortifying internal defenses against cyberattacks and market manipulation.