Meeting on Macroeconomic Financial Issues (Mar.20, 2025)
On March 20th, Acting President and Deputy Prime Minister Choi Sang-mok held a Meeting on Macroeconomic and Financial Issues at the Government Complex-Seoul with the Governor of the Bank of Korea, the Governor of the Financial Supervisory Service, and the Vice Chairman of the Financial Services Commission. During the meeting, they discussed financial and foreign exchange (FX) market trends at home and abroad as well as future plans following the results of the U.S. Federal Open Market Committee (FOMC) meeting.
Last night, the U.S. FOMC decided to hold the benchmark interest rate steady for the second consecutive time following January (a range of 4.25% - 4.50%). The Committee projected slower economic growth and higher inflation in the U.S., maintaining its previous forecast of a 50bp rate cut for this year. Chair Jerome Powell stated that there is no need to be in a hurry to cut rates, while also noting that long-term inflation expectations remained well-anchored. The global financial markets perceived the outcome of this meeting as dovish, leading to a rise in major U.S. stock indexes and a decline in Treasury yields.
The meeting participants agreed that while volatility in the domestic financial and FX markets has somewhat eased recently, external uncertainties such as reciprocal tariff imposition by the U.S. (on April 2), concerns over global economic slowdown, geopolitical factors including those in the Middle East and Ukraine, and the timing and extent of monetary policy adjustments in major countries still persist, making it necessary to sustain a sense of caution.
Under these circumstances, Acting President Choi instructed to continue operating a 24-hour market monitoring system in collaboration with relevant agencies, closely monitoring policy trends in major countries, including the U.S., and assessing their impact on the Korean economy.
Furthermore, he noted that given that the global credit rating agency Fitch has positively assessed the external soundness of the Korean economy, citing continuous current account surpluses and a high ratio of net foreign assets to GDP, and that global institutional investors expressed their confidence during the investor relations (IR) session on the Korean economy (March 10th – 14th, New York), relevant ministries should work together to ensure the maintenance of Korea’s external creditworthiness. He also emphasized that the government should actively communicate with the market, including holding an IR for foreign investors this month regarding the inclusion in the World Government Bond Index (WGBI), to expand the demand base; not only that, much efforts should be made to thoroughly monitor and manage the smooth implementation of the resumption of short selling and the stabilization of alternative trading platforms.
Last but not least, he directed that the housing market stabilization measures announced on March 19th be implemented without any disruption and emphasized the need to meticulously monitor the real estate market situation in collaboration with relevant agencies until the housing market stability is firmly established.
Please refer to the attached files.
