Seoul: South Korea will activate an emergency economic response system and deploy all available economic policy tools, including a potential supplementary budget, to address economic uncertainties arising from an ongoing Middle East crisis, announced Seoul's finance chief on Wednesday. Financial markets are experiencing increased volatility with the Korean won plummeting against the U.S. dollar and domestic fuel prices surging due to recent U.S.-Israeli strikes on Iran and Iran's retaliatory actions in the region.

According to Yonhap News Agency, Finance Minister Koo Yun-cheol stated that the government is determined to implement comprehensive support measures, including a supplementary budget if deemed necessary, to mitigate the impact of the Middle East situation on the nation's economy, industries, and citizens' livelihoods. This strategy includes the introduction of a temporary cap on domestic fuel prices within the week.

In addition to these measures, South Korean authorities are preparing to combat hoarding and price gouging of petroleum products. The government will offer fuel-linked subsidies specifically for diesel used by freight trucks, buses, and taxis, to ease the economic pressure on essential transportation services.

To counter potential disruptions to energy supplies, particularly through the critical Strait of Hormuz, the government plans to take a zero-tolerance approach toward any collusive behavior by oil refiners. "We will prevent hoarding and refusal to sell by oil refiners and gas stations by introducing a public notice banning stockpiling and speculative practices involving petroleum products," Koo emphasized.

Given its heavy reliance on imported energy, South Korea is especially susceptible to external price shocks, which can exacerbate inflation. The government's proactive measures aim to stabilize the economy and protect it from further adverse impacts.