ID :
26747
Mon, 10/27/2008 - 09:34
Auther :
Shortlink :
https://www.oananews.org//node/26747
The shortlink copeid
Seoul mulls additional tax, interest cuts to fight economic crisis
(ATTN: UPDATES with more details from 14th para; CHANGES headline, paras 1-3)
By Yoo Cheong-mo
SEOUL, Oct. 26 (Yonhap) -- The South Korean government is gearing up to further cut interest rates and taxes and expand its fiscal spending and exports in the face of a global financial crisis, officials at the presidential office and the central bank said Sunday after President Lee Myung-bak presided over an emergency economic policy meeting.
The Lee government will also proactively address panic in the nation's foreign
currency and stock markets by quickly securing parliamentary approval of its plan
to guarantee up to US$100 billion in domestic banks' foreign-currency loans and
by beefing up its policy cooperation with foreign countries through various
multilateral meetings, said the officials.
At the emergency policy meeting convened at the presidential office, President
Lee instructed his economic policymakers to implement further tax reductions and
expand the government's fiscal expenditures to prevent the ongoing financial
crisis from spilling over into the real economy, according to presidential
spokesman Lee Dong-kwan.
President Lee also called for concerted nationwide efforts to regain the
confidence of foreign and domestic investors in the South Korean economy and
financial markets, said the president's spokesman.
In addition, the president ordered his Cabinet ministers to double their efforts
to consolidate international policy coordination by faithfully following up on a
number of bilateral and multilateral agreements reached at the just-ended
Asia-Europe Meeting summit, said the spokesman.
"The government has to push ahead with additional tax cuts and expansion of its
fiscal spending to ensure that the financial crisis would not lead to a slump in
the real economy," the president was quoted as saying.
"Under the current circumstances, global sentiment towards the Korean economy and
its market circumstances is very critical. Foreign investors, as well as the
Korean people, should be given a full explanation of the government's economic
policies and their expected benefits."
President Lee, who returned home Saturday night after attending the ASEM summit
in Beijing, convened the emergency economic policy meeting at Cheong Wa Dae to
map out countermeasures to address domestic financial market upheavals.
Amid worsening financial turmoil worldwide, the benchmark Korea Composite Stock
Price Index on Friday plummeted below the 1,000-mark for the first time since
June 30, 2005, while the Korean currency has declined almost 34 percent to the
U.S. dollar so far this year.
The meeting was attended by Prime Minister Han Seung-soo, Finance Minister Kang
Man-soo, Bank of Korea (BOK) Governor Lee Seong-tae, Financial Services
Commission Chairman Jun Kwang Woo and Bahk Byung-won, senior presidential
secretary for economic policy.
According to presidential secretary Bahk, President Lee and other officials at
the meeting agreed that the nation's market interest rate should be further
lowered to help lessen financial burdens on debt-heavy small businesses and
households, as well as to minimize bad debts held by local financial
institutions.
"Participants in the Cheong Wa Dae meeting agreed that the market interest rate
should be further stabilized to avert a slump in the real economy and revitalize
sluggish business conditions," Bahk said in a media briefing.
Bahk's remarks immediately raised speculation that the BOK is set to carry out an
additional interest rate cut, following the reduction of its benchmark interest
rate by a quarter percentage point to 5 percent on Oct. 9.
The BOK said Sunday its Monetary Policy Committee will call a special session on
Monday morning to discuss comprehensive measures to fight the financial market
crisis, prodding market watchers to forecast that the central bank may cut its
target for the inter-bank call rate to 4.75 percent or 4.5 percent.
Bahk also explained that the government will focus its policy efforts on boosting
exports to push the nation's current account back into the black and on improving
labor market flexibility and industrial deregulations to increase the private
sector's investments and job creation.
"The worldwide economic slump is threatening both the nation's export growth and
corporate profitability. Considering its devastating impact on consumption and
corporate and household debts, comprehensive measures to revive the real economic
sector are urgently needed," said Bahk, who had formerly served as vice finance
minister.
"Participants at the Cheong Wa Dae meeting also shared the view that Korean stock
investors have been excessively sensitive to some external factors."
President Lee has on recent occasions expressed high expectations for the Group
of 20 financial summit slated for mid-November in Washington D.C., saying that
the upcoming summit meeting must generate "substantive and productive" results
through closer consultations between emerging and advanced economies.
On Friday, Lee met in Beijing with leaders of China, Japan and 10 member states
of the Association of Southeast Asian Nations, producing an agreement to create a
US$80 billion joint fund by next June and to push for the establishment of a
regional economic surveillance organization to ensure greater financial stability
in Asia.
ycm@yna.co.kr
(END)
By Yoo Cheong-mo
SEOUL, Oct. 26 (Yonhap) -- The South Korean government is gearing up to further cut interest rates and taxes and expand its fiscal spending and exports in the face of a global financial crisis, officials at the presidential office and the central bank said Sunday after President Lee Myung-bak presided over an emergency economic policy meeting.
The Lee government will also proactively address panic in the nation's foreign
currency and stock markets by quickly securing parliamentary approval of its plan
to guarantee up to US$100 billion in domestic banks' foreign-currency loans and
by beefing up its policy cooperation with foreign countries through various
multilateral meetings, said the officials.
At the emergency policy meeting convened at the presidential office, President
Lee instructed his economic policymakers to implement further tax reductions and
expand the government's fiscal expenditures to prevent the ongoing financial
crisis from spilling over into the real economy, according to presidential
spokesman Lee Dong-kwan.
President Lee also called for concerted nationwide efforts to regain the
confidence of foreign and domestic investors in the South Korean economy and
financial markets, said the president's spokesman.
In addition, the president ordered his Cabinet ministers to double their efforts
to consolidate international policy coordination by faithfully following up on a
number of bilateral and multilateral agreements reached at the just-ended
Asia-Europe Meeting summit, said the spokesman.
"The government has to push ahead with additional tax cuts and expansion of its
fiscal spending to ensure that the financial crisis would not lead to a slump in
the real economy," the president was quoted as saying.
"Under the current circumstances, global sentiment towards the Korean economy and
its market circumstances is very critical. Foreign investors, as well as the
Korean people, should be given a full explanation of the government's economic
policies and their expected benefits."
President Lee, who returned home Saturday night after attending the ASEM summit
in Beijing, convened the emergency economic policy meeting at Cheong Wa Dae to
map out countermeasures to address domestic financial market upheavals.
Amid worsening financial turmoil worldwide, the benchmark Korea Composite Stock
Price Index on Friday plummeted below the 1,000-mark for the first time since
June 30, 2005, while the Korean currency has declined almost 34 percent to the
U.S. dollar so far this year.
The meeting was attended by Prime Minister Han Seung-soo, Finance Minister Kang
Man-soo, Bank of Korea (BOK) Governor Lee Seong-tae, Financial Services
Commission Chairman Jun Kwang Woo and Bahk Byung-won, senior presidential
secretary for economic policy.
According to presidential secretary Bahk, President Lee and other officials at
the meeting agreed that the nation's market interest rate should be further
lowered to help lessen financial burdens on debt-heavy small businesses and
households, as well as to minimize bad debts held by local financial
institutions.
"Participants in the Cheong Wa Dae meeting agreed that the market interest rate
should be further stabilized to avert a slump in the real economy and revitalize
sluggish business conditions," Bahk said in a media briefing.
Bahk's remarks immediately raised speculation that the BOK is set to carry out an
additional interest rate cut, following the reduction of its benchmark interest
rate by a quarter percentage point to 5 percent on Oct. 9.
The BOK said Sunday its Monetary Policy Committee will call a special session on
Monday morning to discuss comprehensive measures to fight the financial market
crisis, prodding market watchers to forecast that the central bank may cut its
target for the inter-bank call rate to 4.75 percent or 4.5 percent.
Bahk also explained that the government will focus its policy efforts on boosting
exports to push the nation's current account back into the black and on improving
labor market flexibility and industrial deregulations to increase the private
sector's investments and job creation.
"The worldwide economic slump is threatening both the nation's export growth and
corporate profitability. Considering its devastating impact on consumption and
corporate and household debts, comprehensive measures to revive the real economic
sector are urgently needed," said Bahk, who had formerly served as vice finance
minister.
"Participants at the Cheong Wa Dae meeting also shared the view that Korean stock
investors have been excessively sensitive to some external factors."
President Lee has on recent occasions expressed high expectations for the Group
of 20 financial summit slated for mid-November in Washington D.C., saying that
the upcoming summit meeting must generate "substantive and productive" results
through closer consultations between emerging and advanced economies.
On Friday, Lee met in Beijing with leaders of China, Japan and 10 member states
of the Association of Southeast Asian Nations, producing an agreement to create a
US$80 billion joint fund by next June and to push for the establishment of a
regional economic surveillance organization to ensure greater financial stability
in Asia.
ycm@yna.co.kr
(END)
