Deputy Prime Minister and Minister of Economy and Finance Lee Hyung-il stated that preparations are underway to implement market stabilization measures if stock market volatility increases. The decision to activate the stock market stabilization fund or temporarily suspend short selling will depend on market conditions.
During a press briefing on October 16 in Bangkok, Thailand, Lee said, "We are always monitoring market conditions and are prepared to implement our market stabilization measures if necessary." However, he cautioned that discussing specific measures in advance could diminish their effectiveness.
Recently, the domestic stock market has experienced increased volatility due to concerns over rising global interest rates, doubts about the profitability of artificial intelligence (AI) and semiconductor investments, and geopolitical risks stemming from the Middle East. The KOSPI index fell sharply by 5.46% and 7.57% on October 13 and 15, respectively, and dropped to the 5,400 range during trading on October 19.
Despite this volatility, Lee assessed that the fundamentals of the domestic economy and stock market remain robust. He noted, "Currently, investment is driving growth, but over time, this growth will also shift towards consumption," citing a significant current account surplus as evidence. According to the Bank of Korea, the current account surplus for August reached $46.11 billion, marking the second-largest monthly surplus on record. The cumulative surplus from January to August totaled $279.2 billion.
The government plans to pursue not only short-term market stabilization but also improvements in the capital market structure and the discovery of new growth drivers. Lee emphasized the importance of finding new sources of growth beyond semiconductors, including the seven key seeds, the Korean Green Transition (K-GX), and the service sector. He also mentioned policies aimed at strengthening market conditions, such as productive finance and individual comprehensive asset management accounts (ISAs) and the Our Child Independence Fund.
* This article has been translated by AI.
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