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[세종=이데일리 원다연 기자] The 1st Vice Minister of Strategy and Finance Kim Yong-beom said on the 19th, “We will closely monitor the impact of the launch of the US Biden administration this week on the domestic and overseas financial markets.”
Vice Minister Kim Yong-beom held a macroeconomic and financial conference at the Seoul Bank Center this morning and said, “Even with the prolonged COVID-19 outbreak, the domestic financial market is showing a relatively good trend, but it should be noted that some volatility is occurring.”
Deputy Minister Kim said, “Recently in the global financial market, US Treasury yields have risen in line with the expectation of economic recovery following the announcement of a large-scale economic stimulus plan by the US Biden administration and the expansion of government bond issuance, which has emerged as an important variable in the global foreign exchange market.”
He said, “When the 10-year US Treasury bond rate exceeded 1%, the global dollar’s weakening trend has been corrected, and major currencies such as the euro, yen, and yuan all showed weakness against the dollar.”
“Some have raised the prospect that the US Fed can reduce quantitative easing in response to rising inflation expectations, but market concerns such as, last week, that it is not time to discuss the exit of the Fed’s easing policy stance by Chairman Powell. “The global financial market is showing a relatively stable trend while softening the market.”
The government said it will closely examine the impact of the launch of the Biden administration this week on the financial markets.
Deputy Minister Kim said, “This week’s hearing for the nominee of US Treasury Secretary Yellen and the government will closely examine the related trends as the policy promotion of the new administration is in full swing after the inauguration of US President Biden, which can affect the global financial market.”
It also announced that it will strengthen monitoring of long-term interest rates in Korea.
Vice Minister Kim analyzed that “the rise in domestic long-term interest rates is due to a combination of the effects of risk aversion mitigation from rising US interest rates, a sense of wariness in supply and demand of domestic treasury bonds, as well as improvements in domestic and international economic indicators, and expectations for early vaccine commercialization.”
He said, “The widening of the long-term and short-term interest rate difference is a phenomenon that occurs in major countries, although there are differences in degrees, and above all, it can be interpreted as being greatly influenced by external factors such as expectations of economic stimulus measures in major countries such as the United States.”
Deputy Minister Kim said, “The government will make every effort to maintain stability in the financial sector by monitoring changes in internal and external conditions and long-term interest rate reactions, taking note of the possibility of expanding market volatility.