Finance chief vows support for livelihoods as forex, financial volatility continues

Korea's finance minister on Wednesday vowed to roll out efforts to stabilize people's livelihoods amid lingering volatility in foreign exchange and financial markets.

Finance Minister Koo Yun-cheol made the remarks during a meeting with economy-related ministries, noting that challenges for the economy remain despite an all-time high current account surplus posted in May.

Earlier in the morning, the Bank of Korea (BOK) said the current account surplus totaled $38.61 billion in May, up from $28.29 billion the previous month.

"Despite such positive macroeconomic indicators, volatility in foreign exchange and financial markets continues," Koo said. "Due to the impact of the Middle East war, including inflationary pressure and slowing employment, pressure on people's livelihoods continues as well."

To revitalize growth, Koo said Korea will make all-out efforts to successfully implement the three "megaprojects," unveiled recently, which envision a national transformation driven by semiconductors, physical AI and AI data centers.

"We intend to proactively respond to changes in macroeconomic conditions, including the booming chip industry, and unveil the economic growth strategy for the second half soon, which will help revitalize the country's potential economic growth and address economic disparity," Koo said.

During a separate meeting aimed at monitoring market conditions, Koo discussed ways to address the recent financial market volatility with BOK Gov. Shin Hyun-song and other financial officials.

The financial officials noted that the outflow of foreign capital has been contributing to recent market volatility, calling for a coordinated response among relevant agencies to address such challenges.

"As for the stock market, participants assessed that sell-offs by foreign investors and institutions to cash in profits from recent sharp gains and rebalance their portfolios, as well as adjustments in the AI cycle outlook, have led to extended volatility," the Finance Ministry said.

"The participants agreed to closely review risk factors that may lead to excessive volatility in the stock market," it added.

Participants also agreed on the need to foster next-generation growth engines, such as biotechnology, defense and space industries, in order to ease dependence on the semiconductor and AI segments, the ministry said.

Yonhap