(ATTN: CHANGES photo)
SEOUL, Nov. 19 (Yonhap) -- South Korea's central bank chief said Monday that it is necessary to build resilience against fallout stemming from financial jitters in foreign countries.
"We must enhance the overall resilience of the regional economy so that sudden changes in capital flows triggered by external shocks do not lead to systemic risks," Bank of Korea (BOK) Gov. Lee Ju-yeol said in a conference in Seoul.
As a small, open economy, South Korea is very susceptible to external financial challenges, such as monetary normalization of the United States or a stock rout from the U.S. and China.
In the South Korean stock market, foreign ownership reached some 35 percent in terms of market capitalization.
"To this end, we must reinforce our capacities and policy space to properly respond to external risks," said Lee. "This may be done by improving current account balances, holding sufficient foreign reserves and enhancing exchange rate flexibility."
He also said the international community should make concerted efforts to beef up financial safety nets in Asia in a way to buffer possible downside risks coming from other side of the world.
One month into eased social distancing, S. Korea wrestles with cluster infections, cases with unknown routes
Virus outbreak sheds light on overlooked side of highly touted 'fast' delivery services
Moon's post-corona presidency laden with tough tasks
S. Korea shifts toward new normal of everyday quarantine but wary of 'blind spots'
Anti-Tada bill a major setback for Korea's innovation drive