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South Korea Vows Bold, Preemptive Steps as Won Slides, Yields Jump

The regulator extended large backstops covering bonds plus real-estate project financing through next year.

Overview

  • In a meeting with private experts and senior officials, FSC chair Lee Eog-weon said authorities are ready to act preemptively to curb volatility.
  • After the Bank of Korea held its policy rate at 2.5% late last month, bond yields have climbed.
  • The FSC extended 38 trillion won in bond-market stabilization funds and 61 trillion won in real-estate project financing support into next year.
  • The won closed at 1,473.7 per U.S. dollar on Friday, approaching the 1,500 level that has pressured sentiment.
  • Officials emphasized economic resilience, citing bank soundness, ample foreign-exchange reserves and managed household debt, while traders wager the easing cycle has ended or could remain prolonged.