A liquidity crunch South Korea is currently facing has to do with multiple factors, mainly led by uncertainties about where the economy is headed amid soaring interest rates and the rapidly depreciating local currency, the country’s top financial policymaker said Monday.

“We had prepared the contingencies but the market conditions were worse than what we had expected,” Kim Joo-hyun, chairman of the Financial Services Commission, said at a National Assembly audit. Kim referred to the corporate bond-buying program the government revealed Sunday, calling the fund, worth at least 50 trillion won ($34 billion), a “strong” response to calm bond and short-term money markets.

A credit default reported this month by a local developer backed by Gangwon Province sent shock waves across the bond markets because investors took the delinquency as a breach of a provincial guarantee against insolvency -- an event market participants hardly expect to see outside times of a full-blown crisis. The developer opened the Legoland theme park in the province in May.

“There is clearly fallout from the default, but that’s not the whole story behind volatility gripping the wider financial market,” Kim said, stressing liquidity support will be extended in a timely manner, with the Bank of Korea chipping in with tools to help make the agency aid count in every way, including buying up subprime corporate debt.

The central bank will seek all liquidity measures, according to Kim, who briefed lawmakers on the bank’s plans, in a surprising intervention after the Bank of Korea governor a day prior had clearly sounded a different note.

At the time, BOK Gov. Rhee Chang-yong said a special purpose vehicle that buys subprime corporate debt was not yet on the table, noting the bank’s seven-member board that makes a rate decision would discuss the issue shortly. A senior Bank of Korea official confirmed Monday the governor had yet to float the discussion.