Gov't to urge import limits to stem nosediving currency

SEOUL, Oct. 7 (Yonhap) -- The government said Tuesday that it plans to urge local companies to limit unnecessary imports to prevent the freefall of the Korean won, which threatens the country's economic stability.

The Ministry of Knowledge Economy said the move is designed to get companies to
prioritize import requirements so they only buy absolute necessities, while
taking steps to attract more foreign investments.
Such measures can boost the country's foreign currency reserves, which have been
falling for six straight months to US$239.7 billion as of last month.
The move by the ministry in charge of trade comes as the local currency fell 59.1
won in today's trading, ending at 1,328.1 won to the dollar and causing
policymakers to scramble to try and calm the panic-stricken market.
The week won is also attributable to the ballooning trade deficit, which hit
$14.24 billion as of late September from a surplus of $11.93 billion in 2007.
"Since the government cannot force companies (to limit imports), any such
requests will be voluntary, with individual companies making their own
decisions," an official said.
He added that emphasis will be on construction companies that bought large
quantities of steel from China, because Beijing has said it will start levying
export duties on the product.
"Such imports could become a liability since the local construction market is
currently in a slump," the trade expert claimed.
In addition to construction companies, oil refiners have also been increasing
imports to take advantage of cheaper prices abroad.
Knowledge Economy Minister Lee Youn-ho, meanwhile, plans to hold a meeting with
representatives of the Korea Trade-Investment Promotion Agency, the Korea Export
Insurance Corp. and the Korea International Trade Association on Thursday to
discuss ways to bolster exports and attract more foreign investments.
yonngong@yna.co.kr
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