Finance Minister Choi Sang-mok vowed Thursday to stay vigilant on growing uncertainties regarding the possible interest rate cuts by the United States and other nations, and to take appropriate steps.
Choi made the remarks during an emergency macroeconomic meeting meant to assess the Federal Reserve’s rate-setting meeting Wednesday (U.S. time), where it kept the benchmark interest rate at between 5.25-5.5 percent for a fourth straight time.
Fed Chair Jerome Powell also tamped down market speculations that it would begin cutting federal funds rates as soon as next month, saying it still needed “greater confidence” that inflation was lower “sustainably” and the scenario of a rate cut in March is “probably not the most likely case.”
“As expectations for an early rate cut have cooled, the global financial market has shown greater volatility,” Choi said.
“The domestic financial and foreign exchange markets have been relatively stable. But uncertainties are high over when and how much major nations will move t
o cut interest rates. The government will not let our guard down and keep close tabs on developments for timely responses based on our contingency plans,” he said.
The Fed’s latest freeze put the gap between the key rates of South Korea and the U.S. at up to 2 percentage points.
Source: Yonhap News Agency