What Measures Will BOK Take Amid the Middle East Crisis?
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Synopsis
As military tensions rise in the Middle East, the Bank of Korea is poised to act decisively to stabilize markets. Learn how the U.S. actions have impacted South Korean stocks and what steps the central bank plans to take to manage this uncertainty.
Key Takeaways
- Bank of Korea is prepared to implement immediate market stabilisation measures.
- U.S. military actions have significantly increased market uncertainties.
- South Korean stocks have already begun to reflect these uncertainties.
- Global oil prices and inflation could be affected by the instability.
- Continuous monitoring of the situation is being conducted by the BOK.
Seoul, June 23 (NationPress) The military actions taken by the United States in the Middle East have escalated market uncertainties, according to the Bank of Korea, which asserted on Monday that it would implement timely market stabilisation measures as needed.
This declaration follows U.S. President Donald Trump's announcement of precision airstrikes on three critical nuclear sites in Iran over the weekend, intensifying the situation in the Middle East and raising concerns regarding its repercussions on global markets, as reported by Yonhap news agency.
Bank of Korea Deputy Governor Yoo Sang-dai indicated during an emergency task force meeting that, "Due to the significant increase in uncertainty caused by U.S. military actions in the Middle East, we will remain vigilant and continuously monitor the evolving situation and its effects on both domestic and international financial and economic conditions through our 24-hour monitoring system."
He further stated, "Should market volatility escalate dramatically, we will enact appropriate stabilisation measures without delay."
Officials at the meeting noted that instability in global oil prices could heighten uncertainties surrounding the global economy and inflation, potentially increasing risk aversion sentiment worldwide, according to the Bank of Korea.
In response to the increased uncertainties in the Middle East, South Korean stocks fell sharply on Monday morning following the U.S. airstrikes on Iranian nuclear facilities over the weekend.
The benchmark Korea Composite Stock Price Index (KOSPI) declined by 15.87 points, or 0.53 percent, reaching 3,005.97 by 11:20 a.m.
Engaging in the Israel-Iran conflict, the U.S. launched airstrikes using B-2 bombers on three significant nuclear sites in Iran on Saturday, with President Trump labeling the operation as "successful" and asserting that the Iranian sites were "obliterated."
Most major stocks faced declines, with prominent player Samsung Electronics dropping 2.35 percent and rival SK hynix falling 0.1 percent.
Other significant losses included Samsung Biologics, which fell 2.07 percent, and LG Energy Solution, which plummeted 3.77 percent. The top automaker Hyundai Motor also retreated by 3.57 percent.
Conversely, the refining and internet sectors saw gains; leading refiner SK Innovation increased by 0.2 percent, while top internet portal Naver rose by 3.34 percent.
The local currency traded at 1,380.7 won against the U.S. dollar at 11:20 a.m., down sharply by 15.1 won from the previous session.
Point of View
The Bank of Korea's proactive stance on market stabilization reflects a commitment to safeguarding economic stability. As uncertainties loom over global oil prices and financial markets, it is crucial for financial institutions to remain vigilant and responsive to protect both domestic and international economic interests.
NationPress
23/06/2025
Frequently Asked Questions
What actions is the Bank of Korea taking in response to the Middle East crisis?
The Bank of Korea has pledged to implement timely market stabilisation measures if necessary, in light of heightened uncertainties due to U.S. military involvement in the Middle East.
How have South Korean stocks reacted to the recent U.S. airstrikes?
South Korean stocks saw a decline, with the KOSPI index dropping by 0.53% as market uncertainties rose following the U.S. bombing of Iranian nuclear facilities.
What are the potential impacts of the Middle East crisis on the global economy?
The instability in the Middle East could lead to increased uncertainties surrounding global oil prices, inflation, and heightened risk aversion sentiment worldwide.
