SEJONG, May 13 — South Korea said Monday that it will take steps to stabilise its financial market if necessary but insisted that United States tariff hikes on Chinese products may have only a limited impact on the financial market, Yonhap news agency reported.
Lee Ho-seung, the first vice minister of economy and finance, said that direct effects of the US move on South Korea’s real-sector economy are limited, noting that the tariffs will take effect on Chinese goods that depart from China after May 10.
The US raised tariffs on US$200 billion (RM832.5 billion) worth of Chinese goods to 25 per cent from 10 per cent Friday, prompting China to issue a statement threatening to retaliate.
The US and China ended their trade negotiations without a deal last week, heightening uncertainties in global trade.
Still, the two sides have indicated their willingness to continue holding talks, though no specific time frame has been set.
Lee said the government will maintain round-the-clock tabs on the financial market and take preemptive actions to try to minimise any fallout from the trade frictions between the US and China.
The government will “quickly take timely steps to stabilise the market in case of volatility increases dramatically,” Lee said in a meeting with senior officials of the central bank and other financial agencies in Seoul.
Lee said South Korea’s solid fundamentals, such as foreign exchange reserves, are a key factor that could stabilise the financial market.
South Korea’s foreign reserves stood at US$404.03 billion as of end-April, the world’s ninth largest, according to the Bank of Korea.
South Korea — a small, open economy — depends heavily on exports and foreign capital investment, a situation that makes it vulnerable to external shocks. — Bernama
