South Korea's government and the central bank agreed Friday, they will need to buy more government bonds if needed to stabilize the local bond market and cooperate to curb growing inflationary pressure amid surging energy costs.

Key takeaways from a joint statement

"We will closely cooperate to operate fiscal, monetary and financial policies in a concerted manner to harmonize various policy goals.”

"Volatility could increase related to interest rates, foreign exchanges and cross-border capital flows, and asset prices could fall. This could cause negative spillover into household debt, the self-employed and the non-banking sector.”

Market reaction

On the above announcement, the South Korean won (KRW) found fresh bids, knocking down USD/KRW to fresh daily lows of $1,198.89, marginally lower on the day.