South Korea's financial regulator said Friday that it reviewed the possible impact from the Democratic People's Republic of Korea (DPRK)'s planned rocket launch on the country's financial market.
On Dec. 1, the DRRK officially announced its plan to launch a three-stage rocket between Dec. 10 and 22 to put a satellite into orbit. This would be the DPRK's second launch under leader Kim Jong Un, who took power following his father Kim Jong Il's death nearly a year ago. The DPRK's previous attempt in April ended in failure.
According to an e-mailed statement, senior officials at the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) discussed the possible negative impact from the rocket launch and the future policy responses against the potential negative effects.
Despite the DPRK's announcement, the local financial market showed stable movement overall, the regulators said, noting that foreigners bought around 2.2 trillion won (2.03 billion U.S. dollars) in local bonds and stocks following the announcement.
The stable movement was attributed to the pre-announcement of the rocket launch plan that was priced in at the market preemptively. The past experience of the long-range missile launch by the DPRK also contributed to the stable reaction of the market.
The South Korean stock market advanced 1.12 percent in April 13 when the DPRK launched the three-stage rocket. The local currency appreciated by 0.56 percent against the U.S. dollar at that time.
In April 2009 when the DPRK fired the long-range missile, the South Korean stocks gained 1.1 percent, with the South Korean won jumping 2.31 percent versus the greenback.
The regulator said that it will closely monitor the possible impact from the DPRK's rocket launch on the local financial market, adding that it will take rapid action against the potential negative reaction in the market with the closer monitoring.