SEOUL, Aug. 9 (Yonhap) -- South Korea's financial authorities vowed Tuesday to take measures to stabilize the local financial markets if necessary, urging market players to remain calm.
The pledge came as the Financial Services Commission (FSC) and its executive body the Financial Supervisory Service (FSS) held an emergency meeting to address the market rout sparked by last week's U.S. rating downgrade.
"We will draw up necessary market-stabilizing steps after monitoring financial market situations," the FSC said in a statement.
The financial watchdog also called for market participants to stay calm, saying the recent market turmoil would have a limited impact on the local economy, given the country's sound fiscal status and large foreign reserves.
Financial authorities plan to continue to hold such meetings before the daily market opening until the financial market regains its stability, it said.
Tuesday's meeting came as the Seoul financial markets were jolted by investors' panic selling driven by the U.S. credit downgrade.
The benchmark Korea Composite Stock Price Index (KOSPI) has fallen more than 16 percent since Aug. 2, gripped by fears about a double-dip recession.
The KOSPI plunged as much as 5.71 percent at one point in the morning session, falling below the 1,800-point level. It tumbled 3.82 percent to a 10-month low of 1,869.45 on Monday on panic selling.
The local currency has depreciated to the dollar for the sixth straight session as global recovery woes revived investors' appetite for safe assets. The Korean won has lost about 3 percent to the greenback since Aug. 2
Global credit rating agency Standard & Poor's cut the U.S. credit rating by one notch to "AA+" from a top-tier "AAA" on Friday, sending global financial markets into a tailspin.
The Group of 20 leading economies pledged on Monday to cooperate closely to tackle market instability, saying that they will take "all necessary initiatives" to support the world's financial stability. But it was not enough to soothe investors' fears about a potential global double-dip downturn.
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