Gov't to 'closely' monitor market conditions: finance minster

(ATTN: TRIMS throughout; ADDS background, details in 6th, last 3 paras)
SEOUL, Feb. 25 (Yonhap) -- The government will "closely" monitor financial market
conditions and take swift action to ease anxiety amid deepening global
uncertainty, South Korea's top economic policymaker said Wednesday.
"Currently, global uncertainty is intensifying, making it almost impossible to
predict what will happen at the next moment," Finance Minister Yoon Jeung-hyun
told a weekly crisis management meeting.
"With external factors remaining out of our control, we must closely monitor
their developments. We will also take action in a swift manner if needed to ease
market anxiety," he added.
The remarks come as South Korea's stock and currency markets have tumbled in
recent days, hit hard by market fluctuations in the U.S. and other advanced
countries. The won plunged to its lowest level in nearly 11 years on Tuesday as
the nation's main stock index lost ground on massive foreign sell-offs.
Market jitters have deepened over a chunk of foreign currency-denominated bonds
set to mature in March, with fears that banks will not be able to pay back the
debts due to a dollar shortage.
In recent sessions, the local foreign exchange market has been gripped by fears
that Japanese financial firms will pull their money out of the South Korean
market en masse next month when they close their books.
Yoon dismissed those fears, saying there is not enough Japanese capital in the
market to warrant concern.
"Borrowings from Japan that are set to mature in the first quarter amount to less
than US$2 billion and Japanese capital in local stocks and bonds stands at around
2 percent and 0.6 percent of the total foreign investment," Yoon said. "The
so-called 'March crisis' scenario has little evidence to support it."
The minister emphasized the importance of exports in ongoing efforts to overcome
the global financial crisis, saying the recent plunge in the won's value may help
bolster the country's main growth engine if the situation is well-managed.
South Korea faces the worst economic downturn in more than a decade since the
1997-98 Asian financial meltdown. The government has forecast the nation's
economy will contract 2 percent this year, compared with the previous year's
2.5-percent advance, on faltering exports and domestic demand.
On Tuesday, Yoon held his first meeting with representatives from the nation's
key business lobby groups since taking office. He called on the business
community to expand hiring and investment, while promising to ease regulations to
bolster corporate activity.
"During the meeting, I could hear diverse requests for deregulation. We will take
the demand seriously and do our best to remove regulations that unnecessarily
hamper business activities," he said.
kokobj@yna.co.kr
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