South Korea`s top economic and monetary authorities vowed to take “decisive actions” to stabilize the financial markets if they turn too volatile from geopolitical risks.

Kim Dong-yeon, deputy prime minister and finance minister, and Lee Ju-yeol, governor of the Bank of Korea, met on Wednesday on signs of capital flight from Korean markets amid violent exchange of war talks between U.S. President Donald Trump and North Korean leader Kim Jong-un.

“The markets have turned slightly calmer this week compared with last week. But volatility could break out depending on the development in the nuclear and missile crisis,” Lee said after his meeting with the deputy prime minister in charge of economic affairs.

“There is no need to be overly anxious as economic fundamentals remain strong, but we will be on our guard and thoroughly prepared,” he said.

Kim warned that the government together with the central bank will closely watch the markets and “act decisively when necessary.”

Last week, North Korea threatened to fire missiles toward the U.S. Pacific territory of Guam, with President Trump following up with a warning of “fire and fury like the world has never seen before.” The saber-rattling continued this week as U.S. Secretary of Defense James Mattis said on Monday that the U.S. would start war if Pyongyang directly fires at the American territory. But Mattis, in a joint op-ed with State Secretary Rex Tillerson in the Wall Street Journal, pledged to seek peaceful settlement of the North Korean nuclear and missile crisis as South Korean President Moon Jae-in, in his Liberation Day national address on Tuesday, vowed to prevent a military confrontation and warned against any U.S military move without its consent.

The Korean composite stock price index retreated 1.9 percent and the won 1.3 percent over the last six trading days. Tensions have eased slightly this week following North Korea’s announcement to delay the strike. The Kospi index finished Wednesday at 2,348.26, up 0.6 percent from the previous session.

The won-dollar exchange rate stood at 1,141.30 won, gaining 0.02 percent against the dollar.

By Yoon Won-sup and Kim Gyu-sik

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