The government will enhance monitoring of the economy and financial markets and devise appropriate responses based on contingency plans amid escalating tensions in the Middle East, the finance ministry here said on Thursday.

The pledge was made during a meeting on macroeconomic issues presided over by Acting Finance Minister Lee Hyoung-il and attended by Bank of Korea (BOK) Deputy Gov. Ryoo Sang-dai, along with senior officials from the Financial Services Commission and the Financial Supervisory Service, according to the Ministry of Economy and Finance.

"Following Israel's airstrike on Iran, volatility in commodity prices and global financial markets has increased," Lee said, reports Yonhap news agency.

"The domestic financial market remains relatively stable, but uncertainty remains high due to the Israel-Iran conflict, as well as unclear U.S. tariff policies," he added.

In response, the government is "on alert, closely monitoring the situation and continuing to operate a 24-hour monitoring system," Lee said, adding that a joint emergency response team involving relevant agencies is currently in operation.

"The government will respond swiftly, in close coordination with relevant agencies, if necessary, in accordance with contingency plans based on various scenarios," Lee stated.

The central bank reaffirmed efforts to help stabilise the market in its own separate meeting.

"Geopolitical risks have significantly increased due to the recent military clash between Iran and Israel and concerns over potential escalation. We will maintain heightened vigilance and closely monitor market conditions in light of the possibility of increased volatility in financial and foreign exchange markets," BOK Deputy Gov. Park Jong-woo said.

Regarding the recent U.S. Federal Open Market Committee (FOMC) meeting, Park noted that uncertainty surrounding the future path of U.S. monetary policy has grown.

"Fed Chair Jerome Powell indicated a cautious approach to policy decisions, taking into account such factors as U.S. tariff policy, while projections among Fed officials remain widely divergent," Park said.

The Fed kept its key interest rate unchanged and maintained its forecast of two rate cuts this year, as it continues to monitor the effects of President Donald Trump's tariff measures and the escalating Israel-Iran conflict.