Finance minister dismisses March crisis theory

SEOUL, Dec. 5 (Yonhap) -- South Korea's finance minister on Friday brushed aside
a fast-spreading rumor that the country may suffer a fresh foreign exchange
crisis early next year due to a massive exodus of foreign capital.

Fears are growing that South Korea's financial system may face a meltdown as
Japanese banks could unload their holdings of bonds issued by the South Korean
government to settle accounts before March.
"Just like in September, a crisis scenario is spreading as the local economy is
undergoing a tough time," Finance Minister Kang Man-soo told a weekly meeting of
economy-related ministers. "But it is totally groundless in light of related
figures."
"The controversial debts owed to Japanese banks stand at US$10.6 billion, of
which only 9 percent or $1.1 billion will mature during the first quarter of next
year," Kang added.
The remarks come as worries are deepening that South Korea's export-dependent
economy could be hard-hit by a global recession. Falling domestic demand, anemic
exports growth and growing household debts are weighing on the economy.
Government officials have been quick to assuage such concerns for fear that
ongoing market stabilization efforts could be derailed.
On Thursday, the presidential office of Chong Wa Dae denied the crisis fear as
"groundless," citing specific numbers of foreign debts to mature in the first
quarter of next year.
Earlier, Vice Finance Minister Kim Dong-soo told a radio program that the March
crisis scenario is based on "little evidence or substance," but added that the
government will closely monitor the movement of Japan-linked capital.
kokobj@yna.co.kr
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