ID :
27763
Fri, 10/31/2008 - 17:55
Auther :
Shortlink :
https://www.oananews.org//node/27763
The shortlink copeid
S. Korea will overcome crisis under current dollar demand: official
SEOUL, Oct. 31 (Yonhap) -- A ranking South Korean presidential aide said Friday the country will "definitely" overcome the current financial crisis if the demand for the dollar remains at its current level.
The remarks came a day after South Korea and the United States agreed on a
currency swap deal of up to US$300 billion to help South Korean banks and
companies secure enough liquidity to service debts and pay for their business
activities.
The increased demand for dollars has put downward pressure on the won, with the
local currency falling over 35 percent against the dollar so far this year.
On whether the currency swap will help stabilize markets, Presidential Secretary
for Economy Park Byeong-won said, "We will have to watch how things go, but if
demand for foreign currency stays around the same level, we will surely walk free
from the current difficulties."
Park also called for increased fiscal spending during a parliamentary audit on
Friday, saying the spending is necessary to activate the real economy.
"We still have more to work on," he added during a parliamentary audit session.
"We must lower interest rates for small- and mid-tier companies and ordinary
people, and make up for the anticipated decrease of exports with domestic trade."
"What I said during last month's parliamentary session -- that there is little
chance of the U.S.-triggered financial crisis threatening the real economy -- was
wrong," Park admitted. "There is a large chance of that. But as a government
official, I could not risk having people overly worried."
South Korea has been attempting to shore up its financial markets with a package
of measures in recent weeks to soothe growing jitters after the collapse of major
U.S. investment banks last month.
Analysts expect that the currency swap with the U.S., along with other
stabilization measures, will provide respite for Asia's worst-performing currency
and stock markets by restoring confidence and easing the dollar crunch for banks
and companies.
The remarks came a day after South Korea and the United States agreed on a
currency swap deal of up to US$300 billion to help South Korean banks and
companies secure enough liquidity to service debts and pay for their business
activities.
The increased demand for dollars has put downward pressure on the won, with the
local currency falling over 35 percent against the dollar so far this year.
On whether the currency swap will help stabilize markets, Presidential Secretary
for Economy Park Byeong-won said, "We will have to watch how things go, but if
demand for foreign currency stays around the same level, we will surely walk free
from the current difficulties."
Park also called for increased fiscal spending during a parliamentary audit on
Friday, saying the spending is necessary to activate the real economy.
"We still have more to work on," he added during a parliamentary audit session.
"We must lower interest rates for small- and mid-tier companies and ordinary
people, and make up for the anticipated decrease of exports with domestic trade."
"What I said during last month's parliamentary session -- that there is little
chance of the U.S.-triggered financial crisis threatening the real economy -- was
wrong," Park admitted. "There is a large chance of that. But as a government
official, I could not risk having people overly worried."
South Korea has been attempting to shore up its financial markets with a package
of measures in recent weeks to soothe growing jitters after the collapse of major
U.S. investment banks last month.
Analysts expect that the currency swap with the U.S., along with other
stabilization measures, will provide respite for Asia's worst-performing currency
and stock markets by restoring confidence and easing the dollar crunch for banks
and companies.
