SEOUL, Feb. 20 (Xinhua) -- South Korea's finance ministry said Thursday that it will beef up its market monitoring and take action preemptively to stabilize its financial market in preparations for possible volatilities from the U.S. Federal Reserve's stimulus cut.
The Finance Ministry said in its annual policy report to President Park Geun-hye that it will strengthen monitoring and make preemptive efforts for market stability, while stepping up international cooperation via such channels as G-20, to brace for possible jitters from the Fed's tapering of its quantitative easing and instabilities in emerging economies.
The Fed scaled down its monthly bond purchases by 10 billion U. S. dollars further to 65 billion dollars this month after reducing by the same size in the previous month.
Currencies of some emerging economies with weak fundamentals tumbled against the U.S. dollar after the U.S. central bank announced its decision on the stimulus cut in December last year.
The Fed's tapering caused foreign capital exodus from some emerging nations, with currencies of Argentina and Turkey plunging about 19 percent and 7 percent each for two months from December.
Chances grew that the South Korean economy, which depends on exports for around half of its growth, could be hit by rising volatilities in the global financial market.
Fed Chair Janet Yellen, who was sworn in on Feb. 3 as head of the U.S. central bank, said in her first testimony in Congress that she would continue with the stimulus cut as long as the U.S. economic recovery picked up.
Meanwhile, the ministry said it will draw up and implement, without a hitch, the three-year economic innovation plan, which will focus on the restructuring of debt-ridden public corporations and the balanced growth of exports and domestic demand.
The government will disclose details on debts of public agencies to enhance transparency of their management, while instructing the agencies to sell non-core assets to reduce their debt ratio to 200 percent by 2017. The debt ratio was 239 percent as of the end of last year.
Under the three-year plan, public companies should also cut back on excessive benefits and perks to employees, especially chief executives, while streamlining management.