Koreas exchanged fire in the western waters led to tense relations with the North, the South Korean people suddenly panic, the Korean economy, especially financial market prospects are more uncertain.
In this tense atmosphere, the South Korean government said it would pay close attention to developments to the domestic market situation and, if necessary, the Government will take timely response.
In addition, the South Korean government has been said that shelling of the South Korean economy is only temporary, the Korean economy has sufficient ability to withstand external pressure.
South Korean stock market opened sharply down yesterday
When the 23 Japan and South Korea exchanged fire in the West Sea toward the news, the South Korean people panic. People who saw on TV the center of the village Yin Ping Island shelling the day was the scene of smoke everywhere, there have been a huge shock, the military people also leave with a worried face looked at the TV screen, some people worry that does not go on like this will be a war? Some workers said, the company put up a young male staff member is will not be called up to prepare for the Army?
The exchange of fire to the South Korean economy is indeed no small vibration. Day of the incident, South Korean securities market tumbled, the won to weaken sharply. The second day of the incident, that is, 24, Incheon, Korea Coast Guard said the Marine Corps in the Yin Ping Island construction site of the new residence and found the bodies of two construction workers, now, South Korea in the death of this shelling incident toll to 4 people, Yin Ping islanders began to take the marine police guard ships began to Inchon evacuation.
Affected by this news, the Korean stock market opened 24 slump, Korea Composite Stock Index (KOSPI index) opened the previous trading day down 45.02 points (2.33 ), falling below 1890 points; won also continued weakness in the won dollar exchange rate over the previous jumped 37.5 won the opening day. South Korea s financial and securities markets are in a disturbed state.
Korean Government or by short term impact that the economy
In response to fighting the impact of events on the Korean economy, the Korean government and financial authorities in the 24 economic and financial situation in the morning held an emergency meeting and declared it the impact of the Korean economy may not be very long.
In the morning, South Korean officials planning the Ministry of Finance said in a speech which is still difficult to determine economic trends and the possible impact of the incident, but according to the North Korean nuclear test, the West Sea battle, the day the ship incident, such as happened in the past judge, this event is temporary geopolitical risks occur, if the situation does not appear particularly changes in market conditions in South Korea will gradually stabilize.
South Korean Ministry of Finance in order to stabilize the confidence of investors planning, specifically to prove the continued development of the Korean economy. Planning and the Ministry of Finance said that the Korean economy has been showing a strong recovery, the financial system is sound and current account surplus continued to maintain the level of the project, foreign exchange reserves are sufficient, combined with the Korean economy in the international community s credibility is high, so the Korean economy have sufficient capacity to resist external shocks.
However, the South Korean government admitted that this shelling different from the past, this incident by the loss of ordinary citizens, South Korea, which has the potential to adversely affect investor psychology, especially for Korea s consumer psychology may will be some impact.
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In addition, the Korean government is also concerned that foreign capital due to the incident caused huge outflow of funds, this may blow Korean financial market. In fact, since the Fed this month, the South Korean central bank had concerns about the United States through the second round of the quantitative easing policy, the United States to obtain long term interest rates, stock prices, the dollar fell and other effects, but its cause The excess liquidity may be transferred to emerging economies, an asset price bubble. To South Korea, the United States may result in quantitative easing liquidity, so that foreign investment funds in and out of the Korean market, which may be on the Korean exchange rate, stock market prices and other negative impact.
Now, in this concern on the Korean economy, but also faced the double whammy of the shelling. To this end, the Korean government and financial authorities stressed that the Korean government is closely monitoring the financial and foreign exchange markets, and if South Korea s financial and foreign exchange markets due to investor anxiety and drastic changes occur, or tilt, the South Korean government and the Bank of Korea will work together and close cooperation, and actively take measures to stabilize the market response. If necessary, we will also take fully put to the market liquidity, and so won an additional response options.
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