Bank of Korea signage is displayed on top of the central bank’s headquarters building in Seoul, South Korea, Thursday, Aug. 16, 2018. South Korea’s central bank raised interest rates for the second consecutive meeting on Thursday to fight consumer inflation below 13. the highest of the year, and further increased the expectations of price increases to the highest since 2008.
Jean Chung | Bloomberg | Getty Images
The Bank of Korea said on Wednesday it would encourage short-term liquidity and expand measures to stabilize the FX market as needed after South Korean President Yoon Suk Yeol pulled off a surprise declaration of martial law.
The announcement came after the BOK held an emergency meeting. The central bank said it will also make special loans available in the market to inject funds if needed.
The central bank planned to hold an unusual board meeting nearby 9:00 am local time on wednesday last week, The BOK reduced its benchmark interest rate by 25 basis points in a surprise move.
At that time, Local news agency Yonhap reported South Korea’s financial regulator said it is ready to allocate 10 trillion won ($7.07 billion) to a stock market stabilization fund at any time.
On Tuesday night, Yoon declared emergency martial law and mobilized the army. Within hours, the National Assembly voted to revoke the emergency order, forcing Yoon to lift martial law early Wednesday. Yoon announced that the deployed military units have also withdrawn.
“In our view, the negative impact on the economy and financial markets may be short-lived as uncertainties surrounding the political and economic environment can be quickly mitigated by a proactive policy response,” Citi analysts said in a note.
South Korean Finance Minister Choi Sang-mok He was sworn in on Wednesday pumping unlimited liquidity into financial markets if necessary to stabilize them.
South Korean shares it had major upheavals in the US on Tuesday amid the political turmoil in Korea. The iShares MSCI South Korea ETF (EWY)The stock, which tracks more than 90 large and mid-sized South Korean companies, fell as much as 7% to hit a 52-week low before closing losses 1.6% lower.
South Korean stock markets began trading at the usual 9:00 a.m.
– Reuters contributed to this story
This is a developing story. Check back later for updates.
