13th Ministerial Meeting to Address Current Economic Issues

  • DivisionEconomic Policy Bureau - Economic Policy Division
  • DateMarch 14, 2017
  • Tel044-215-2712

13th Ministerial Meeting on Current Economic Issues



Deputy Prime Minister Yoo Il Ho presided over the 13th Ministerial Meeting to Address Current Economic Issues.  At the meeting, Fed’s impending rate hike and its possible impact on financial markets were main topics of discussion. 


Fed’s Impending Rate Hike


It is very likely that the Fed will raise its key interest rate in March[1].  If the Fed raises rates three times this year as was signaled last December, domestic financial markets will have limited impacts.  However, if the Fed raises rates faster than what was signaled, market volatility will increase, and uncertainties at home and abroad may worsen the situation. 


The government will keep an eye on the market and be prepared for market stabilization in case of sudden volatility.


  • Hold a Meeting on Macroeconomic and Financial Market Developments following the FOMC, and look into how markets react to the rate hike and discuss ways to cope with it
  • Run a 24 hour monitoring system, composed of government-wide observation teams including market watch and FX & International Finance task forces, to check how markets, foreign media and investment banks react, as well as capital movements
  • Implement the government’s contingency plans, such as market stabilization measures, if necessary


Prepare for Possible Impacts on Financial Markets


  • Work to successfully manage household debt problems:  Curb the 2017 household debt increase below 10 percent, and expand fixed rate loans with amortization schedules
  • Establish a market-led corporate restructuring system
  • Increase working class financial support:  Provide a total of 7 trillion won, an increase from 5.7 trillion won, through the 4 major financial support programs, and increase lower interest rate loans from 1 trillion won to 2 trillion won
  • Help companies raise capital:  Provide around 2.2 trillion won worth of support, including a 600 billion won bond purchase program, to facilitate corporate bond issuance by SMEs, as well as run bond market stabilization funds worth more than 10 trillion won


Please refer to the attached pdf




[1] Possibility of a March rate hike suggested by forward contracts: 34% (Feb 17), 52% (Feb 28), 100% (Mar 13)

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