Posted March. 09, 2013 04:24,
South Korea`s financial markets showed no significant fluctuations Friday despite North Korea`s flurry of threats over the United Nations Security Councils latest resolution on more sanctions on Pyongyang.
The South Korean government and its financial authorities decided to take strong action if necessary to help stabilize the market given the threat of an act of aggression by Pyongyang.
The benchmark KOSPI stock index closed at 2,006.01 Friday, up 1.61 points (0.08 percent) from Thursday. The Dow in the U.S. continued a three-day winning streak to hit a record high in New York, so the KOSPI was also expected to soar.
After the North threatened to nullify the 1953 armistice agreement that ended the Korean War, however, the South Korean market lost ground for a spike and closed almost flat.
Kwak Joong-bo, a researcher at Samsung Securities, said, Stock prices edged up despite North Korea risks due to the learning effect from past events (that the influence of North Korean affairs is short-lived).
On the Seoul foreign exchange market, the won-dollar rate closed at 1,090.30, up 3.20 points from Thursday.
Hong Seok-chan, a researcher at Daeshin Securities in Seoul, said, The Norths threat was not specific and thus had little effect on the forex market.
The South Korean government and financial authorities convened emergency meetings in succession and decided to step up inspections to prepare for an unexpected situation. Vice Strategy and Finance Minister Shin Je-yoon convened a meeting to inspect the financial market situations in Korea and overseas at the Korea Federation of Bank headquarters in Seoul on Friday.
We will remain vigilant to be fully ready for North Korea risks, he said, adding, Until the appointment of the deputy prime minister for economy, we will hold daily meetings of assistant ministers and director-generals to step up monitoring of the markets.
The Financial Services Commission also held Friday an emergency meeting to inspect the financial situation chaired by Vice Chairman Chu Kyung-ho, and announced bold measures to stabilize the market if the financial market fluctuates. Chu said, Chances are high that North Korea risks will have just a short-term impact, but added, Since the level of sanctions on the North is high and thus could raise financial volatility, I urge close inspection of risks related to North Korean affairs.
The Bank of Korea in Seoul held a meeting on responding to currency and financial situations, and decided to operate a 24-hour emergency inspection system. The Financial Supervisory Service in a meeting on examining emergency financial situations announced a stronger inspection of foreign currency liquidity.