BOK'S STANCE ON RUSSIAN INVASION

[Anchor Lead]

Russia’s invasion of Ukraine also rattled financial markets in Korea and other Asian countries all day Thursday. The Bank of Korea, which froze its latest key rate, said if the military operation turns into a full scale war, it will likely have a significant impact on the Korean economy.

[Pkg]

Korea’s benchmark KOSPI posted a sharp drop following a news update around Thursday noon that reported on Russia's military operation in Ukraine. Institutions and foreign investors unloaded over one trillion won worth of domestic shares and the KOSPI closed the day 2.6% lower. The tech-heavy KOSDAQ suffered a bigger drop.

[Soundbite] Seo Sang-yeong(Mirae Asset Securities) : "Overall investment sentiment will inevitably take a hit as institutions and foreigners sharply offload their holdings."

The main Asian stock indexes including those of Hong Kong and Japan also ended the day sharply lower. With increased preference for safer assets, the won-dollar exchange rate surpassed 1,200 won while local gold prices hit the highest level in 18 months. Cryptocurrency prices tumbled even more than the stock market. The Bank of Korea which froze the key rate at 1.25% expressed concern that if the Ukraine crisis turns into a full-scale war, the economic impact would be significant. The central bank believes the 3% growth target and 3.1% inflation target will both be affected.

[Soundbite] Lee Ju-yeol(BOK Governor) : "The crisis could immediately push up inflationary pressure and deal a blow to global trade, thereby affecting domestic production and exports."

Meanwhile the government said Korean businesses in Ukraine have been fully evacuated while companies in Russia are operating as normal and monitoring the latest developments.