SEOUL : South Korea’s top financial regulatory agency told officials on Wednesday to prepare to re-activate a stock market stabilisation fund as global markets tumble on fears that rising interest rates will trigger a recession.
The Financial Services Commission (FSC) said Vice Chairman Kim So-young told officials to make preparations for the implementation of measures to stabilise financial markets, including the re-activation of a stock market stabilisation fund.
Officials from the finance ministry and the central bank also attended the meeting, the commission said.
It did not provide further details such as the size, timing or conditions for the fund to be activated. In the past, brokerage houses and financial institutions have been asked to make contributions to the fund which it can use to buy shares of major companies.
South Korea’s benchmark KOSPI share index has fallen 27 per cent so far this year, while the won currency has lost over 17 per cent of its value against the dollar. The domestic bond markets has also been highly volatile.
Kim also called for close coordination between authorities in monitoring market movements and taking steps to help restore stability when needed.