Middle East crisis: BOK vows 'swift' market stabilisation measures

Seoul, June 23 The United States' military involvement in the Middle East has heightened market uncertainties, the South Korean central bank said on Monday, vowing to take "appropriate market stabilisation measures" in a timely manner, if necessary.

The assessment came as U.S. President Donald Trump said his country's military conducted precision strikes on three key nuclear facilities in Iran over the weekend, exacerbating the crisis in the Middle East and sparking concerns about its impact on the global markets, reports Yonhap news agency.

"Given that U.S. military involvement has significantly heightened uncertainty in the Middle East, we will maintain a high level of vigilance and closely monitor developments in the situation and their impact on domestic and global financial and economic conditions through a 24-hour monitoring system," Bank of Korea (BOK) Deputy Gov. Yoo Sang-dai said during an emergency task force meeting on the matter.

"If market volatility becomes excessively amplified, appropriate market stabilisation measures will be implemented in a timely manner," he added.

During the meeting, officials assessed that uncertainties surrounding the global economy and inflation could increase due to the instability in global oil prices, and that global risk aversion sentiment could be further heightened, according to the BOK.

South Korean stocks lost ground late on Monday morning over heightened Middle Eastern uncertainties following the United States' bombing attacks on key Iranian nuclear facilities over the weekend.

The benchmark Korea Composite Stock Price Index (KOSPI) dropped 15.87 points, or 0.53 percent, to 3,005.97 as of 11:20 a.m.

Engaging itself in the Israel-Iran conflict, the U.S. used B-2 bombers to launch air strikes on three key nuclear sites in Iran on Saturday, with President Donald Trump describing the operation as "successful" and claiming the Iranian sites were "obliterated."

Most blue chips lost ground, with market heavyweight Samsung Electronics plunging 2.35 percent and chip rival SK hynix shedding 0.1 percent.

Top bio company Samsung Biologics dropped 2.07 percent, and leading battery manufacturer LG Energy Solution plummeted 3.77 percent. Top automaker Hyundai Motor retreated 3.57 percent.

In contrast, refiners and internet portal operators advanced. Leading refiner SK Innovation rose 0.2 percent, and top internet portal firm Naver gained 3.34 percent.

The local currency was trading at 1,380.7 won against the greenback at 11:20 a.m., sharply down 15.1 won from the previous session.

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