ID :
200696
Thu, 08/11/2011 - 14:37
Auther :
Shortlink :
http://m.oananews.org//node/200696
The shortlink copeid
S. Korea seeking to ease currency volatility: official
(ATTN: UPDATES with more details, comments from para 8)
SEOUL, Aug. 11 (Yonhap) -- South Korea will continue to seek to ward off severe currency volatility but will not intervene in the market to bolster exports or tame inflation, a senior finance ministry official said Thursday.
"The government will do its best to minimize any excessive volatility in the currency market," Choi Jong-ku, a deputy finance minister, said. "But the government will not step in to boost exports or stabilize prices."
In a meeting with foreign correspondents in Seoul, Choi said the government will continue to cooperate with the central bank and that there will be no changes in the government's foreign exchange policy.
"The government won't target a certain foreign exchange rate, since the appropriate level is unknown," he said.
Choi's remarks came amid worries that the ongoing financial turmoil and the Federal Reserve's recent pledge to keep its record-low interest rates over the next two years may affect the South Korean currency and its exports, the main driver of its economic growth.
He said the Fed's low-rate pledge would ease concerns on the country's exports to the U.S. but at the same time raise risks on excessive foreign capital inflows.
The government will continue efforts to counter such problems, since excessive capital flows have been one of the country's largest risk factors, he added.
"Foreigners have mainly been buying up government bonds and monetary stabilization bonds," he said, adding there has been a sharp influx of funds from China that the government is keeping tabs on.
He, however, said that despite calls by some market actors to restrict foreign purchase of local bonds, there really is no realistic way for Seoul to take such measures.
Choi conceded that South Korea is not completely immune to currency volatility like the one it experienced following the 2008 collapse of Lehman Brothers, although overall conditions have improved since then.
"It would be hasty to categorize Korea as a high-risk country without considering other related factors - such as a country's growth potential, external soundness and government's policy capacity," the official said.
Choi said diversified South Korean trade destinations -- with emerging markets accounting for more than 70 percent of all of its exports -- have strengthened the country's external soundness and policy capacity, thus helping the nation weather the ongoing financial storm.
The finance ministry official, meanwhile, said that at present, there is a pressing need to strengthen international cooperation between advanced industrialized countries and large emerging economies that hold a large amount of foreign reserves.
The Group of 20 leading global economies agreed over the weekend to work together to limit the fallouts of the latest economic crisis brought on by the downgrading of the U.S. credit rating by Standard and Poor's Ratings Services late last week.
SEOUL, Aug. 11 (Yonhap) -- South Korea will continue to seek to ward off severe currency volatility but will not intervene in the market to bolster exports or tame inflation, a senior finance ministry official said Thursday.
"The government will do its best to minimize any excessive volatility in the currency market," Choi Jong-ku, a deputy finance minister, said. "But the government will not step in to boost exports or stabilize prices."
In a meeting with foreign correspondents in Seoul, Choi said the government will continue to cooperate with the central bank and that there will be no changes in the government's foreign exchange policy.
"The government won't target a certain foreign exchange rate, since the appropriate level is unknown," he said.
Choi's remarks came amid worries that the ongoing financial turmoil and the Federal Reserve's recent pledge to keep its record-low interest rates over the next two years may affect the South Korean currency and its exports, the main driver of its economic growth.
He said the Fed's low-rate pledge would ease concerns on the country's exports to the U.S. but at the same time raise risks on excessive foreign capital inflows.
The government will continue efforts to counter such problems, since excessive capital flows have been one of the country's largest risk factors, he added.
"Foreigners have mainly been buying up government bonds and monetary stabilization bonds," he said, adding there has been a sharp influx of funds from China that the government is keeping tabs on.
He, however, said that despite calls by some market actors to restrict foreign purchase of local bonds, there really is no realistic way for Seoul to take such measures.
Choi conceded that South Korea is not completely immune to currency volatility like the one it experienced following the 2008 collapse of Lehman Brothers, although overall conditions have improved since then.
"It would be hasty to categorize Korea as a high-risk country without considering other related factors - such as a country's growth potential, external soundness and government's policy capacity," the official said.
Choi said diversified South Korean trade destinations -- with emerging markets accounting for more than 70 percent of all of its exports -- have strengthened the country's external soundness and policy capacity, thus helping the nation weather the ongoing financial storm.
The finance ministry official, meanwhile, said that at present, there is a pressing need to strengthen international cooperation between advanced industrialized countries and large emerging economies that hold a large amount of foreign reserves.
The Group of 20 leading global economies agreed over the weekend to work together to limit the fallouts of the latest economic crisis brought on by the downgrading of the U.S. credit rating by Standard and Poor's Ratings Services late last week.
