Ministry of Finance and Economy

On September 18, Deputy Prime Minister and Minister of Finance and Economy Koo Yun Cheol chaired the Emergency Economic Headquarters Meeting and the Ministerial Meeting on Economic Affairs at the Government Complex Sejong.   Deputy Prime Minister Koo noted that despite challenging external conditions, including the conflict in the Middle East, the Korean economy continues to demonstrate solid fundamentals; exports have increased significantly, domestic demand, including consumption, has continued to improve, and global credit rating agencies Moody’s and Fitch have also positively assessed Korea’s robust economic growth.   Deputy Prime Minister Koo went on to note that uncertainty surrounding the situation in the Middle East has recently increased again, as reflected in the sharp rise in global oil prices; against this backdrop, the government will remain vigilant, maintain its emergency response system, and make every effort to ensure stable energy supply and prices. He added that active diplomatic efforts, diversification of import sources, and strategic oil reserve swaps are expected to prevent major disruptions to energy supply for the time being, and that the government will operate a joint monitoring team with the refining industry to review crude oil supply conditions on a daily basis and take necessary measures promptly.   At the meeting, participants discussed the status of the government’s response to the Middle East conflict, the designation of the 10th round of maximum petroleum product prices, fuel tax policy from October onward, and measures to reduce fuel prices at highway gas stations and EV charging fees during the Chuseok holiday.   After a comprehensive review of recent global oil price developments and the burden on households, the government will announce at 6:00 p.m. on September 18 the 10th round of maximum petroleum product prices, which will take effect at midnight on September 19. Furthermore, to ease the public’s fuel cost burden amid the recent rise in oil prices, the government will extend the fuel tax cuts, currently scheduled to expire at the end of this month, for an additional two months through the end of November. The 15 percent tax cut on gasoline will remain in place, while the higher 25 percent tax cuts will be maintained on diesel, which is essential for industry and logistics, as well as on butane, widely used to fuel small trucks and other vehicles used for livelihoods.   During the Chuseok holiday from September 24 to 27, the government will also reduce fuel prices at highway gas stations nationwide by KRW 100 per liter from their September 17 levels, with the public sector bearing part of the burden of high fuel prices and helping meet public expectations for service innovation at highway service areas. EV charging fees will also be discounted during daytime hours over the holiday, when supplies of solar and other renewable energy are abundant, so that the benefits of expanded renewable energy deployment can be passed on to the public. Going forward, the government will continue to closely review overall conditions affecting people’s livelihoods, including prices, and implement measures that deliver tangible relief to the public. Please refer to the attached files. 

On September 17, Deputy Prime Minister and Minister of Finance and Economy Koo Yun Cheol convened the Expanded Meeting on Macroeconomic and Financial Stability[1] at the Government Complex Seoul to review developments in global financial markets following the U.S. Federal Open Market Committee’s (FOMC) decision earlier today (Korea time) to raise interest rates, as well as the impact of the conflict in the Middle East on the financial and foreign exchange (FX) markets, and to discuss policy responses.   Participants noted that the U.S. Federal Reserve (Fed) raised its policy rate in light of resilient economic and labor market conditions, persistently elevated inflation, the recent rise in global oil prices, and heightened geopolitical uncertainty. They assessed the market impact of the rate hike to be limited, as the move had already been priced in and overall financial market conditions remained stable. Meanwhile, global oil prices and capital flows will be closely monitored, with particular attention to the Fed’s strengthened commitment to price stability, the possibility of further rate hikes later this year, and upcoming monetary policy decisions by the Bank of Japan (BOJ), the Bank of England (BOE), and other central banks this week. The impact of these developments on Korea’s financial and FX markets will also be reviewed in coordination with relevant authorities.   Participants noted that volatility in the government bond market has increased amid changes in domestic and external conditions, including the U.S. Fed’s recent policy rate hike. Given that such uncertainties at home and abroad are expected to persist, they agreed to closely monitor developments in the government bond market and stand ready to take necessary market stabilization measures in the event of excessive one-sided market movements. The recent rise in lending rates was also reviewed, along with the potential impact of higher interest rates on the repayment burden of vulnerable borrowers. The previously announced support measures for vulnerable borrowers will be implemented as planned, with supplementary measures to be prepared if necessary.   Participants also reviewed the impact of changes in domestic and external economic conditions, including the recent current account surplus, on liquidity in the market. Related fund flows and liquidity conditions will be closely monitored, while their impact on financial and asset markets will continue to be assessed.   Deputy Prime Minister Koo expressed his appreciation to the heads and staff of relevant institutions, including the Bank of Korea, the Financial Services Commission, and the Financial Supervisory Service, for their joint efforts to maintain stability in the financial and FX markets. He also called on the economic and financial authorities to continue to respond swiftly and in a coordinated manner, building on the cooperation framework established thus far.   [1] Governor of the Bank of Korea, Chairman of the Financial Services Commission, and Governor of the Financial Supervisory Service Please refer to the attached files. 

On September 15, the Ministry of Finance and Economy (MOFE), together with the Organisation for Economic Co-operation and Development (OECD), held the 4th Korea-OECD Seminar on Corporate Governance of State-Owned Enterprises* at the OECD headquarters in Paris, France.     * Launched in 2023 and jointly held annually by Korea and the OECD, the seminar brings together officials responsible for public institution policies from OECD member countries and other participating countries to share policy developments concerning public institutions and draw policy implications for their management and operation.   The forum brought together the Director General for Public Institutions Policy at MOFE, the Ambassador of Korea to the OECD, the Director of the Directorate for Financial and Enterprise Affairs at the OECD, and officials responsible for public institution policies from 28 countries and international organizations. Participants discussed their policy experiences and future challenges under three themes* related to the management and operation of public institutions.   * ❶ Implementing sustainable management in public institutions   ❷ AI adoption and corporate governance reform of state-owned enterprises   ➌ Linking public policy objectives with performance evaluation of public institutions   In its opening remarks, the Korean delegation underscored the importance of translating the principles of the OECD Guidelines on Corporate Governance of State-Owned Enterprises, revised in 2024, into policies and implementation practices tailored to each country’s circumstances. It also emphasized the need for countries to share their experiences and explore practical solutions so that public institutions can deliver reliable public services while achieving sustainable performance amid changes such as climate change and digital transformation.   Ahead of the main sessions, the OECD presented an overview of the corporate governance of Korean state-owned enterprises, drawing on key findings from the forthcoming OECD Ownership and Governance of State-Owned Enterprises 2026.   Session 1*, which focused on sustainable management of public institutions, explored how ownership entities can translate policy commitments on sustainability into concrete targets, incentives, and monitoring frameworks. The OECD presented key findings from its report State Ownership and Sustainability in Asia, while the Korea Institute of Public Finance (KIPF) presented Korea’s experience in developing and applying ESG guidelines to promote ESG management across public institutions.   * Participants: Korea, France, Sweden, Poland and the OECD Session 2*, which discussed AI adoption and corporate governance of state-owned enterprises, examined the opportunities and risks associated with AI, covering data governance and cybersecurity, accountability, and ethical use. The OECD presented its report Managing Risk Across State-Owned Enterprises, while Director of the Public Institutions Reform Division Kim Dong Jin introduced the government’s role in building trustworthy AI governance amid digital transformation, along with Korea’s related policies and practices.     * Participants: Korea, Moldova, and the OECD   Session 3*, which focused on linking public policy objectives with performance management, explored how to set and manage public policy objectives for state-owned enterprises and incorporate them into performance evaluations, drawing on the OECD report Public policy objectives of state-owned enterprises. The KIPF presented Korea’s experience in defining the public objectives of public institutions and operating performance evaluation and incentive systems. Participants from Spain, Morocco, and the International Monetary Fund (IMF) also shared their experiences in balancing commercial and non-commercial objectives and adjusting performance indicators.      * Participants: Korea, Spain, Morocco, the IMF, and the OECD   MOFE will use the discussions from the forum and the policy experiences shared by participating countries to inform the development of future policies for public institutions. It also plans to continue sharing policy practices and cooperating with OECD members on the management and operation of public institutions. Please refer to the attached files.