SEOUL, June 17 (Yonhap) — South Korea will closely monitor the financial market as market volatility could increase following the Federal Reserve’s signal of an earlier-than-expected rate hike, a senior government official said Thursday.
After freezing its key rate at near zero at a policy meeting, the Fed signaled an earlier-than-expected rate increase in 2023 as U.S. inflation is rising amid an economic recovery. The U.S. central bank also hinted at starting to discuss ways to taper bond-buying programs.
Bearing the Fed’s surprise results, South Korea’s key stock index was trading 20.06 points, or 0.61 percent, lower at 3,258.62 as of 9:15 a.m. The Korean currency was trading at 1,130.20 won per U.S. dollar, sharply down 13 won from the previous session.
First Vice Finance Minister Lee Eog-weon said the country has strong economic fundamentals and policy room to cope with potential market volatility, citing its FX reserves and…