The Bank of Korea said Wednesday that it will deploy measures to expand short-term liquidity temporarily to address market volatility following the brief declaration of martial law in the country.
The central bank said it started to buy extra repurchase agreements, or repos, from more financial institutions to increase liquidity available in markets.
The BOK's move followed Finance Minister Choi Sang-mok's announcement earlier in the day to offer an unlimited supply of liquidity, if needed, to stabilize markets that had been rattled by President Yoon Suk Yeol's surprise declaration of martial law late Tuesday night.
Volatility in financial and foreign-exchange markets had increased significantly right after the declaration of martial law, the BOK said in a statement.
The markets have stabilized somewhat since the martial law was lifted by President Yoon after the parliament voted against it hours later, the statement said.
Market sentiment is expected to gradually improve thanks to the South Korean economy's solid fundamentals, but financial authorities will actively seek to take additional measures while closely monitoring the situation, the BOK said.