ID :
21418
Fri, 09/26/2008 - 11:54
Auther :
Shortlink :
http://m.oananews.org//node/21418
The shortlink copeid
(2nd LD) S. Korea to provide US$10 bln to stabilize currency swap market
(ATTN: RECASTS lead, ADDS details in last 2 paras)
SEOUL, Sept. 26 (Yonhap) -- South Korea's Finance Ministry said Friday that it will inject at least US$10 billion into the local currency swap market in an effort to calm the turmoil that has followed the collapse of U.S. investment bank Lehman Brothers Holdings Inc. and provide added liquidity.
"Since the U.S. financial turbulence, the hardest-hit area here is the foreign
currency market. We have decided to supply dollars there by using the nation's
foreign-exchange stabilization fund," Choi Jong-ku, head of the ministry's
international financial bureau, told reporters. "The amount will be at least $10
billion and it will be supplied to the market from this month until earlier next
month. If necessary, there will be more dollar supply down the road."
Choi said that there have been some interventions in the swap market in the past
but the latest action would mark the largest-ever since the nation was hit by the
1997-98 financial crisis.
The intervention comes amid growing concerns that local companies and banks are
having difficulty securing foreign capital as the global market was shocked
recently by the collapse of investment giant Lehman Brothers following a broader
fiasco earlier last week.
It is also in line with comments by Finance Minister Kang Man-soo, who earlier
said that South Korea will take "preemptive" efforts to stave off a shortage of
U.S. dollars in the capital market.
Currently, South Korea holds around $55 billion in its foreign-exchange
stabilization fund. A decrease in the fund could spark concerns that the
government has a weakened capacity to support the declining local currency. The
won has slipped more than 20 percent against the greenback this year.
Choi dismissed such concerns, saying the volume of dollars being injected into
the swap market could be retrieved after a period of time so that the dollar
supply will not affect the nation's overall foreign reserve holdings, which
currently total around $240 billion.
kokobj@yna.co.kr
(END)
SEOUL, Sept. 26 (Yonhap) -- South Korea's Finance Ministry said Friday that it will inject at least US$10 billion into the local currency swap market in an effort to calm the turmoil that has followed the collapse of U.S. investment bank Lehman Brothers Holdings Inc. and provide added liquidity.
"Since the U.S. financial turbulence, the hardest-hit area here is the foreign
currency market. We have decided to supply dollars there by using the nation's
foreign-exchange stabilization fund," Choi Jong-ku, head of the ministry's
international financial bureau, told reporters. "The amount will be at least $10
billion and it will be supplied to the market from this month until earlier next
month. If necessary, there will be more dollar supply down the road."
Choi said that there have been some interventions in the swap market in the past
but the latest action would mark the largest-ever since the nation was hit by the
1997-98 financial crisis.
The intervention comes amid growing concerns that local companies and banks are
having difficulty securing foreign capital as the global market was shocked
recently by the collapse of investment giant Lehman Brothers following a broader
fiasco earlier last week.
It is also in line with comments by Finance Minister Kang Man-soo, who earlier
said that South Korea will take "preemptive" efforts to stave off a shortage of
U.S. dollars in the capital market.
Currently, South Korea holds around $55 billion in its foreign-exchange
stabilization fund. A decrease in the fund could spark concerns that the
government has a weakened capacity to support the declining local currency. The
won has slipped more than 20 percent against the greenback this year.
Choi dismissed such concerns, saying the volume of dollars being injected into
the swap market could be retrieved after a period of time so that the dollar
supply will not affect the nation's overall foreign reserve holdings, which
currently total around $240 billion.
kokobj@yna.co.kr
(END)
