Finance Ministers of the Republic of Korea and the United States reconfirmed liquidity supply preparedness in case of deepening financial instability

Deputy Prime Minister and Minister of Strategy and Finance Choo Kyung-ho poses for a commemorative photo with U.S. Treasury Secretary Janet Yellen, who visited Korea in July. / Photo = News 1

The heads of economy of the Republic of Korea and the United States reaffirmed their position that the two countries will closely cooperate to provide liquidity if necessary, diagnosing that Korea’s foreign currency liquidity situation is good.

According to the Ministry of Strategy and Finance on the 1st, Deputy Prime Minister and Minister of Strategy and Finance Choo Kyung-ho and U.S. Treasury Secretary Janet Yellen held a conference call at 8 pm Korean time the previous day to discuss global economic trends, foreign exchange market cooperation, the US Inflation Reduction Act (IRA), and the Russian crude oil price cap. etc were discussed. They agreed to continue close communication and coordination between the two countries while agreeing on the diagnosis that uncertainty in the global real economy and financial markets is increasing.

“The tightening global financial environment is putting a significant burden on our economy,” Deputy Prime Minister Chu said.

The Ministers evaluated that despite the recent sharp rise in the won-dollar exchange rate, the Korean economy is maintaining solid external soundness thanks to good foreign exchange liquidity and sufficient foreign exchange reserves. He also confirmed that the two countries are ready to work closely together to implement liquidity supply mechanisms if necessary, such as when financial instability is exacerbated due to the spread of liquidity crunch in major countries including Korea.

In addition, Deputy Prime Minister Choo mentioned the contents of a letter in the name of the Deputy Prime Minister expressing concerns about the IRA to Minister Yellen on the 16th of last month, saying, “The concern is spreading around the Korean electric vehicle industry and the National Assembly as the IRA provides tax credits only to North American electric vehicles.” told He then asked, “Please pay special attention to solving the problem.”

Secretary Yellen thanked the ROK for sharing its position and said that the two countries should continue close cooperation.

In addition, the two Ministers also exchanged opinions on the progress of the Russian crude oil price cap system, support for developing countries to respond to climate change through the Green Climate Fund (GCF), and the World Bank’s Pandemic Response Financial Intermediation Fund (FIF). They agreed to continue cooperation in response to global price stability and climate and health issues.

Meanwhile, this conference call was made at the request of the US Treasury Department. It is the fourth time that the two ministers have had an official conversation since the inauguration of Deputy Prime Minister Chu. It has been more than two months since the meeting of the US and ROK finance ministers on July 19.

“The fact that the financial authorities of the two countries meet frequently to discuss current issues is evidence of a strong Korea-US cooperative relationship,” Deputy Prime Minister Chu said. We hope to deepen and develop cooperation,” he said.

Hana Kim, reporter at Hankyung.com [email protected]

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