ID :
199540
Sun, 08/07/2011 - 05:28
Auther :
Shortlink :
http://m.oananews.org//node/199540
The shortlink copeid
Local economy unlikely to enter panic mode despite U.S. rating cut: official
SEOUL (Yonhap) - The South Korean economy is unlikely to enter panic mode despite the recent downgrading of the U.S. sovereign credit rating and anticipated instability in the local financial market, a key government official said Sunday.
"Concerns over a downturn do outweigh positive outlooks, but we likely won't see the kind of panic from the global financial crisis in 2008," an official at the presidential office Cheong Wa Dae said. "Experts mostly believe there won't be any major chaos or crisis."
The official acknowledged that South Korea might have overlooked a more pessimistic view that Seoul would need more time to fully recover from the 2008 global crisis, since its financial market hadn't been healthy in the first place.
"There are still issues of deficits, debts, financial turmoil and joblessness in the U.S.," the official said. "We're recognizing some problems with our own financial market."
The New York-based Standard and Poor's Rating Services (S&P) announced Friday that it would reduce the U.S. credit rating from "AAA" to "AA+," in the absence of a credible plan by the U.S. Congress and the Obama administration to lower the burgeoning budget deficit. The move marks the first time that the U.S. sovereign rating has fallen from the "AAA" level since 1941.
The South Korean official said there is little Seoul can do at this juncture as it needs to first wait for the U.S. and, to some extent, Europe to respond.
"We will continue to monitor the U.S. and European markets and prepare our emergency measures," the official said.
On the S&P's downgrading of the U.S. rating, the official said, "Since it's a country that produces the key international currency, it should be able to handle this on its own, though the recovery may take some time."
Senior officials from the finance ministry, the Financial Services Commission (FSC), the Financial Supervisory Service (FSS) and the central Bank of Korea are scheduled to hold a meeting later Sunday to discuss the fallout of the S&P decision and its impact on the global economy.
The KOSPI, Seoul's key stock index, nosedived 8.88 percent, or 189.46 points, last week to close at 1,943.75.
"Concerns over a downturn do outweigh positive outlooks, but we likely won't see the kind of panic from the global financial crisis in 2008," an official at the presidential office Cheong Wa Dae said. "Experts mostly believe there won't be any major chaos or crisis."
The official acknowledged that South Korea might have overlooked a more pessimistic view that Seoul would need more time to fully recover from the 2008 global crisis, since its financial market hadn't been healthy in the first place.
"There are still issues of deficits, debts, financial turmoil and joblessness in the U.S.," the official said. "We're recognizing some problems with our own financial market."
The New York-based Standard and Poor's Rating Services (S&P) announced Friday that it would reduce the U.S. credit rating from "AAA" to "AA+," in the absence of a credible plan by the U.S. Congress and the Obama administration to lower the burgeoning budget deficit. The move marks the first time that the U.S. sovereign rating has fallen from the "AAA" level since 1941.
The South Korean official said there is little Seoul can do at this juncture as it needs to first wait for the U.S. and, to some extent, Europe to respond.
"We will continue to monitor the U.S. and European markets and prepare our emergency measures," the official said.
On the S&P's downgrading of the U.S. rating, the official said, "Since it's a country that produces the key international currency, it should be able to handle this on its own, though the recovery may take some time."
Senior officials from the finance ministry, the Financial Services Commission (FSC), the Financial Supervisory Service (FSS) and the central Bank of Korea are scheduled to hold a meeting later Sunday to discuss the fallout of the S&P decision and its impact on the global economy.
The KOSPI, Seoul's key stock index, nosedived 8.88 percent, or 189.46 points, last week to close at 1,943.75.
