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Korea Government Releases

49th Macroeconomic and Financial Stability Meeting

Ministry of Strategy and Finance 2016.12.15
At the 49th Macroeconomic and Financial Stability Meeting held on December 15 following the December FOMC meeting where the Fed announced a 25 basis point rate hike and signaled a faster pace of increases in 2017, the government discussed its possible influence on the Korean economy and measures to absorb the impact.

Fed� Rate Hike and Possible Impacts on the Korean Economy

Regarding the Fed� 25 basis point rate hike and its signal of three rate increases next year instead of two anticipated in September, the government announced that the rate hikes may increase financial market volatility in Korea due to increased risk aversion of investors.

Measures to Absorb Impacts

To reduce the effect of Fed� rate hikes on the Korean economy, the government will

�ccelerate household hold debt restructuring, and ease debt burdens on the working class through loan support programs
�atch changes in SME financing conditions, and be prepared to immediately appropriate the Bond Market Stabilization Fund, if necessary
�onduct stress tests to ensure financial sector soundness, and make sure that financial institutions hold enough capital reserves

* Please refer to the attached pdf.
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