S. Korea to enhance monitoring, contingency plans against global market volatility

The South Korean financial authorities will maintain an enhanced market monitoring system and boost close coordination among relevant agencies against extended volatility in the global financial market, the finance ministry said Monday.

The commitment was made during a meeting among deputy minister-level officials of the ministry, the Bank of Korea and other financial institutions meant to check the market situation and discuss responses.

“Global financial market volatility has widened and uncertainties linger over the Middle East instability,” the ministry said in a release.

“The government and the BOK will maintain a joint round-the-clock monitoring system for financial markets at home and abroad with high vigilance and to cooperate closely with related agencies in accordance with the contingency plan if necessary,” it added.

Last week, global financial markets tumbled as a disappointing U.S. jobs report stoked fears that the world’s largest economy is weakening.

The Dow Jones Industrial Average fell 1.5 percent Friday and the tech-heavy Nasdaq Composite declined 2.43 percent.

The benchmark Korea Composite Stock Price Index (KOSPI) plunged 3.65 percent, the sharpest fall in four years, and Japan’s Nikkei dropped 5.81 percent.

Federal Reserve Chair Jerome Powell has hinted at a policy rate cut at the September meeting, but experts say that it should have acted earlier given the weaker-than-expected jobs report.

“The government will continue efforts to strengthen the fundamentals of our capital and foreign exchange market through corporate value-up programs and other projects and to bolster our external safety net,” the ministry added.