South Korea's Ministry of Economy and Finance said after a joint market situation review meeting with the Bank of Korea, the Financial Services Commission and the Financial Supervisory Service that it will strengthen pre-emptive monitoring and management of risks across the equity, foreign exchange and bond markets. Officials judged that overall conditions remain favorable, but flagged rising leverage in share trading, wider foreign exchange volatility and larger swings in bond yields, and said authorities are prepared to act immediately if excessive one-way moves emerge. The ministry cited May exports rising 53.2 percent year on year to USD 87.75 billion and South Korea's stock market capitalization reaching USD 5.0 trillion, overtaking India to rank sixth globally. At the same time, margin lending for stock purchases rose from KRW 27.3 trillion at end-2025 to KRW 38.0 trillion on June 1, prompting plans for regular checks on credit-backed trading, stronger risk management and investor protection. In foreign exchange markets, volatility has increased despite a record current account surplus, reflecting the Middle East war, continued foreign selling of domestic equities, and foreign investors' rebalancing and profit-taking after the recent equity rally. For the bond market, officials linked higher volatility in government bond yields to global inflation concerns and firmer expectations of domestic rate increases. Agencies will keep monitoring market conditions, maintain close communication with market participants and coordinate a timely response if volatility becomes excessive.

Original source Back to tracker