(Bloomberg) -- South Korea’s policymakers urged calm against a global market rout that has sent the country’s top companies plunging in stock markets, seeking to restore confidence in an economy that continues to grow on an export rally.
Bank of Korea Governor Rhee Chang-yong, Finance Minister Choi Sang-mok and presidential economic advisor Park Chun-sup attended the emergency meeting in Seoul on Tuesday and agreed that they should conduct “calm and rational decision making,” according to a statement from the government.
Asian markets, including South Korea, have reacted “excessively,” they said, when there has not been enough assessment of economic and geopolitical risks weighing on US stocks, according to the statement. The officials pledged to respond according to contingency plans and called for a swift execution of market-stabilization measures if needed.
Financial Services Commission Chairman Kim Byoung-hwan and Financial Supervisory Service Governor Lee Bokhyun also joined the meeting.
The US is a key destination for South Korea’s exports, particularly at a time when China is struggling to recover its economic momentum. US demand for semiconductors is among the biggest sources of growth for South Korea’s economy with Samsung Electronics Co. and SK Hynix Inc. supplying their products to companies like Nvidia.
Samsung and SK Hynix shares plunged on Monday, bringing the local stock market down at one of the steepest paces in history. The financial market meltdown has spurred calls for central banks, including the Federal Reserve, to step in to help by signaling a bigger and earlier-than-expected policy pivot.
The BOK had already faced calls from some South Korean lawmakers to start to cut its benchmark interest rate early. Even though the export-fueled economy got off to a stronger-than-expected expansion at the start of the year, lackluster private consumption and credit risks surrounding developers overshadow the outlook.
Still, the Kospi index has started trading Tuesday with a strong rebound.
The monetary board at the BOK meets on Aug. 22 for its next rate decision. Rhee said last month a rise in household debt worried the board about a risk of financial imbalance, prompting more economists to predict a pivot to start in October.
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