Vice minister predicts limited fall in foreign reserves

SEOUL, Dec. 3 (Yonhap) -- South Korea's foreign reserves will not likely fall below US$200 billion as more dollars are expected to flow into the country down the road, a senior economic policymaker said Wednesday.
The Bank of Korea said earlier in the day that the nation's foreign reserves
totaled $200.51 billion at the end of November, down $11.74 billion from a month
ago, marking the eighth straight month of decline.
The fall stemmed mostly from the government-led injection of the greenback into
the crippled financial system, which has been suffering a dollar shortage that
has weighed on cash-strapped companies, according to the central bank.
"I expect that things will improve down the road, given demand and supply
conditions of dollars," Vice Finance Minister Kim Dong-soo told a local radio
program. Asked whether the reserves will be kept above the $200 billion level,
Kim said, "I think so."
The remarks come as concerns are mounting that accelerating declines in the
nation's foreign reserves could increase market jitters over a dollar liquidity
crunch.
Banks and exporters are demanding more dollar liquidity as they face difficulties
servicing debts and paying for business activities at a time when dollars are
drying up in the market. The won has lost more than 35 percent against the
greenback so far this year.
Kim said that an improvement in the nation's current account, a new credit line
with the U.S. Federal Reserve and other government measures will help limit a
further decline in the nation's foreign reserves.
kokobj@yna.co.kr
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