Seoul's foreign reserves 'enough' to cover external debt: official

SEOUL, Dec. 11 (Yonhap) -- South Korea holds "enough" foreign exchange reserves to pay its external debts and avoid a possible liquidity crunch, a senior economic policymaker said Thursday.

"Our US$200 billion foreign reserves consist mostly of assets that can be easily
recouped," Vice Finance Minister Kim Dong-soo said on a local radio program. "The
global financial crunch caused the reserves to decline recently, but the amount
is still the world's sixth-largest and we think it is enough to cope with
external payment demand."
Thanks to an additional currency swap line with the U.S. and a surplus in the
nation's current account, Kim forecast that the country's foreign reserves would
not decline significantly.
According to the Bank of Korea, the nation's foreign reserves totaled $200.51
billion at the end of November, down $11.74 billion from a month ago. This marked
the eighth straight month of decline in foreign reserves and raised the
possibility of a shortage of funds needed to cope with emergent economic
conditions.
As of the end of November, South Korea had $425.09 billion in external debts,
becoming a net debtor nation for the first time in eight years. Short-term debts,
which mature within a year, accounted for 45 percent of the total.
Meanwhile, Kim projected that South Korea's economy would weaken further in the
first half of next year but forecast a gradual rebound in the second half.
The vice finance minister pledged that the government would continue to supply
liquidity to cash-strapped banks and industries.
kokobj@yna.co.kr
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