South Korea is not faced with a capital flight situation stemming from increased external volatility despite lingering global economic uncertainties, the top economic policymaker said Thursday.

Delivering a keynote speech at the Korea Treasury Bonds International Conference in Seoul, Finance Minister Choi Kyung-hwan expressed confidence that Asia's fourth-largest economy is not being confronted with a capital outflow problem.

"Despite less money being invested into local bonds, but there is a steady inflow into large commercial banks and various other funds," he said.

The assurance comes after the Korean won dropped sharply against the dollar late last week and early this week, following China's stock market crash and spike in tensions with North Korea.

The local currency, however, appreciated vis-a-vis the greenback from Tuesday onwards.

The country's stocks, that also took a beating in the face of the China shock and rise in geopolitical tensions, recovered lost ground in the last three trading sessions.

Choi, who doubles as deputy prime minister in charge of economic affairs, said Seoul will strengthen its monitoring of all market developments and conduct proactive measures to stabilize its financial sector if the need arises. (Yonhap)