South Korea’s financial regulator on Monday pledged to take “swift and bold” actions to stabilise markets if necessary in the wake of Japan’s decision to expand trade curbs against Seoul, Yonhap news agency reported.
Financial Services Commission (FSC) Vice Chairman Sohn Byung Doo told a meeting of senior financial policymakers that there were no unusual movements of Korean financial markets, amid the Japanese measure and a deepening trade dispute between the United States and China.
Financial authorities “are continuing to closely monitor financial market conditions and take swift and bold actions, if needed, to secure financial stability,” Sohn said.
Japan, which tightened exports of key materials to South Korea on July 4 in apparent retaliation over a Seoul court decision requiring a Japanese company to provide compensation for wartime forced labour, decided last week to remove Seoul from a list of trusted export destinations.
South Korean President Moon Jae In vowed to take stern measures against Japan, describing the Japanese decision as an “undeniable trade retaliation against our Supreme Court’s rulings on Korean victims of forced labour.”
The FSC said state-run financial institutions will offer a one-year extension of maturity for outstanding loans and guarantees for companies that are subject to Japan’s tightened export controls.
State-run financial institutions will also provide fresh loans of 6 trillion won(US$4.98 billion) to help stabilise affected business operations and diversify their supply chains, the FSC said.
The FSC has downplayed market speculation that Japan’s export curbs may escalate into retaliatory measures in the Korean financial sector.
However, the government is closely monitoring market situations and remains vigilant with contingency plans in place against any possible scenario, the FSC said.