Home > News Updates > Financial News > World Economy
S.Korea May Face Higher Volatility of Foreign Capital Flow: c.Bank Report
 

South Korea may face a higher volatility of foreign capital flow in and out of the country amid the expected change in monetary policies of major economies, a central bank report showed Thursday.

The Bank of Korea (BOK) held a monetary policy committee meeting, issuing a report that said the country's financial system saw a temporary rise in volatility amid geopolitical risks on the Korean Peninsula before showing a roughly stable picture.

The report said the fast-growing household debts were offset by improved corporate earnings and fiscal soundness of financial institutions, which indicated a healthy resilience of the country's financial system.

However, it noted that the economy should be cautious about a rising volatility of foreign funds flow in and out of its financial market amid the remaining geopolitical risks on the peninsula and the expected alteration in monetary policies of major economies.

The U.S. Federal Reserve left its benchmark interest rate unchanged overnight, but it announced its plan to reduce its enormous bond holdings in a gradual way in the future.

The reduced bond holdings would increase rates on mortgage and other loans over time. The Fed also indicated a higher interest rate within this year, boosting expectations for one more rate hike possibly in December.

Tensions re-escalated on the peninsula after the Democratic People's Republic of Korea (DPRK)'s sixth nuclear test on Sept. 3, which was followed by a test-launch of an intermediate-range ballistic missile (IRBM), called Hwasong-12.

Foreign investors turned into net sellers in the South Korean financial market in August amid the geopolitical risks, after purchasing local stocks and bonds for seven months through July.


(www.chinaview.cn 2017-09-22)
Close