SEJONG, Feb. 12 (Yonhap) -- North Korea's nuclear test will likely have a limited impact on the South Korean economy and its financial markets, but the government is working hard to brace for any worsening situations, Seoul officials said Tuesday.
Pyongyang announced that it conducted its third underground nuclear test at its northern nuclear site earlier in the day, claiming that a smaller and lighter atomic bomb was used in the "successful" test.
The news sent economic policymakers rushing to convene back-to-back emergency meetings to size up its impact on the South Korean economy and financial markets.
Finance Minister Bahk Jae-wan held a meeting with his top ministry officials, which was followed immediately by another gathering chaired by Vice Finance Minister Shin Je-yoon.
"The nuclear test by the North will have a limited impact on the economy," Bahk told the meeting. "The possibility is also slim that it could affect our real economy or sovereign credit ratings," he noted.
Shin echoed the view in a separate meeting with his staff.
"The economy has matured further in the process of getting over crises...I believe that the North's provocations cannot affect our economic fundamentals anymore," he said.
South Korea's financial markets remained relatively stable even after news spread of the North's nuclear test.
The country's benchmark Korea Composite Stock Price Index ended down 0.26 percent to 1,945.79, while its currency rose to 1,090.8 won against the U.S. dollar from the previous trading day's 1,095.7.
North Korea is a major geopolitical risk factor for South Korea's financial markets. Sometimes, provocative moves by the communist neighbor rattle its stock and financial markets significantly.
South Korea's financial markets fared relatively well after the two previous nuclear tests by the communist neighbor in 2006 and 2009, bouncing back days after short-term setbacks.
"The North's nuclear test has been long predicted and already been factored in financial markets," said Choo Kyung-ho, vice chief of the Financial Services Commission, after holding a separate emergency meeting. "Thanks to the so-called learning effect as well, the overall impact was limited."
Policymakers still remain on alert, saying that the North's nuclear test could serve as a "risk factor" for the South Korean economy, emphasizing that the government will take pre-emptive action to prevent market sentiment from deteriorating.
"There is a possibility that (the North's nuclear test) could serve as a risk factor for the economy depending on how the international community and Pyongyang react," said Bahk, the finance minister.
"The government will closely monitor related situations while taking actions in a swift and closely-coordinated manner to prevent market anxiety from spreading," he noted.
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