ID :
24819
Thu, 10/16/2008 - 11:07
Auther :
Shortlink :
https://www.oananews.org//node/24819
The shortlink copeid
S. Korea poised to tackle currency effect on inflation
SEOUL, Oct. 16 (Yonhap) -- South Korea's government will closely monitor the effect of a weaker currency on inflation and take "preemptive" measures to stabilize prices if necessary, a senior policymaker said Thursday.
"To prevent the global financial turmoil from hurting the real economy, the first
thing to do is to stabilize prices," Vice Finance Minister Kim Dong-soo told
reporters before a meeting with government officials. "The government will
closely monitor currency movements and take preemptive action against their
effects on consumer prices."
South Korea's consumer prices jumped 5.1 percent in September, easing from their
10-year high of 5.9 percent in July, thanks to declining oil and raw material
prices. But the won's sharp decline comes as concern among policymakers about
import prices growth and upward pressure on inflation grows.
South Korea's won has plunged more than 29 percent against the U.S. dollar so far
this year. The local currency market has undergone roller coaster sessions in
recent weeks, as global concerns deepened after the collapse of the U.S.
investment bank Lehman Brothers Holdings Inc. last month.
On Thursday, the won opened sharply lower against the U.S. dollar amid growing
concerns that financial turmoil could affect the real economy worldwide, meaning
less overseas demand for goods produced by local exporters.
"The government will continue its efforts to stabilize the won-dollar exchange
rate and keep seeking to build a global network not just with neighboring nations
but also with advanced countries," Kim said.
South Korea is in talks with other Asian nations to create a US$80 billion
multilateral currency swap fund intended to provide liquidity in the region.
Finance Minister Kang Man-soo recently called for advanced nations to include
emerging economies in their currency swap programs to better cope with the
current global financial crisis.
Earlier, the government said that it will issue $5 billion worth of foreign
currency-denominated currency stabilization bonds next year to secure more
foreign reserves to brace for currency market fluctuations.
kokobj@yna.co.kr
(END)
"To prevent the global financial turmoil from hurting the real economy, the first
thing to do is to stabilize prices," Vice Finance Minister Kim Dong-soo told
reporters before a meeting with government officials. "The government will
closely monitor currency movements and take preemptive action against their
effects on consumer prices."
South Korea's consumer prices jumped 5.1 percent in September, easing from their
10-year high of 5.9 percent in July, thanks to declining oil and raw material
prices. But the won's sharp decline comes as concern among policymakers about
import prices growth and upward pressure on inflation grows.
South Korea's won has plunged more than 29 percent against the U.S. dollar so far
this year. The local currency market has undergone roller coaster sessions in
recent weeks, as global concerns deepened after the collapse of the U.S.
investment bank Lehman Brothers Holdings Inc. last month.
On Thursday, the won opened sharply lower against the U.S. dollar amid growing
concerns that financial turmoil could affect the real economy worldwide, meaning
less overseas demand for goods produced by local exporters.
"The government will continue its efforts to stabilize the won-dollar exchange
rate and keep seeking to build a global network not just with neighboring nations
but also with advanced countries," Kim said.
South Korea is in talks with other Asian nations to create a US$80 billion
multilateral currency swap fund intended to provide liquidity in the region.
Finance Minister Kang Man-soo recently called for advanced nations to include
emerging economies in their currency swap programs to better cope with the
current global financial crisis.
Earlier, the government said that it will issue $5 billion worth of foreign
currency-denominated currency stabilization bonds next year to secure more
foreign reserves to brace for currency market fluctuations.
kokobj@yna.co.kr
(END)
