ID :
19103
Fri, 09/12/2008 - 11:15
Auther :
Shortlink :
http://m.oananews.org//node/19103
The shortlink copeid
No massive capital exodus, concerns over 'September crisis' ease: official
SEOUL, Sept. 11 (Yonhap) - The fast-spreading rumors that South Korea could face a repeat of the 1997-98 financial crisis this month proved to be a "ghost story," as there was no massive capital flight from the local bond market this week, a senior economic policymaker said Thursday.
"The main reason behind the so-called 'September crisis' was maturing bonds
held by foreigners this week, but there was no chaos. Yesterday alone, investors
bought a net 600 billion won (US$544.4 million) worth of bonds and they bought
more than 2 trillion won in bond markets this month," Vice Finance Minister
Kim Dong-soo told a local radio program. "This means that foreigners will
keep investing in local treasury bonds down the road."
"It turned out to be a ghost story that didn't materialize. Still, the
government learned a hard lesson and will keep up efforts to prevent the
recurrence of such (rumors)," Kim said.
The comments come after South Korea had been gripped by growing fears that its
economy might face a crisis similar to the one it suffered a decade ago if
foreign investors withdrew their money in droves from the local bond markets.
Around $6.7 trillion worth of bonds were to mature earlier this week.
Despite the government efforts to stem what it calls rumors, the local currency
and stock markets continued to fluctuate, amplifying concerns that a crisis is
imminent.
To stem the spreading of fears, the Finance Ministry sent its officials earlier
this week to Singapore, Hong Kong, London, Boston and New York, where they are
holding presentations aimed at raising $1 billion by issuing sovereign bonds.
The envisioned debt sale was intended to test financial fundamentals of South
Korea and also expected to provide a benchmark spread interest rate for other
local private and public companies that seek to issue bonds in the second half of
this year, the ministry said.
Market observers say that recently worsened market conditions, including the
breakdown of talks over the takeover of struggling Lehman Brothers, could delay
the scheduled issuance of sovereign bonds, but Kim said that the ministry will do
its best to stick to the earlier timetable.
"Financial instability has yet to be dispelled completely so we will take a
close look at market conditions and do our best to issue bonds as initially
planned." Kim said.
"The main reason behind the so-called 'September crisis' was maturing bonds
held by foreigners this week, but there was no chaos. Yesterday alone, investors
bought a net 600 billion won (US$544.4 million) worth of bonds and they bought
more than 2 trillion won in bond markets this month," Vice Finance Minister
Kim Dong-soo told a local radio program. "This means that foreigners will
keep investing in local treasury bonds down the road."
"It turned out to be a ghost story that didn't materialize. Still, the
government learned a hard lesson and will keep up efforts to prevent the
recurrence of such (rumors)," Kim said.
The comments come after South Korea had been gripped by growing fears that its
economy might face a crisis similar to the one it suffered a decade ago if
foreign investors withdrew their money in droves from the local bond markets.
Around $6.7 trillion worth of bonds were to mature earlier this week.
Despite the government efforts to stem what it calls rumors, the local currency
and stock markets continued to fluctuate, amplifying concerns that a crisis is
imminent.
To stem the spreading of fears, the Finance Ministry sent its officials earlier
this week to Singapore, Hong Kong, London, Boston and New York, where they are
holding presentations aimed at raising $1 billion by issuing sovereign bonds.
The envisioned debt sale was intended to test financial fundamentals of South
Korea and also expected to provide a benchmark spread interest rate for other
local private and public companies that seek to issue bonds in the second half of
this year, the ministry said.
Market observers say that recently worsened market conditions, including the
breakdown of talks over the takeover of struggling Lehman Brothers, could delay
the scheduled issuance of sovereign bonds, but Kim said that the ministry will do
its best to stick to the earlier timetable.
"Financial instability has yet to be dispelled completely so we will take a
close look at market conditions and do our best to issue bonds as initially
planned." Kim said.
