Overseas borrowing, FX market conditions to improve: bank heads

SEOUL, March 20 (Yonhap) -- The heads of 11 local banks shared the view on Friday
that the local foreign exchange market will likely stabilize, citing smooth
rollovers of their foreign debt and an improving current account.
"Overall money and foreign exchange markets are expected to improve as local
banks' overseas borrowing is smoothly rolling over and the surplus of the
country's current account is forecast to expand," they said in a statement
released after Bank of Korea Gov. Lee Seong-tae held a monthly meeting with bank
chiefs.
The remarks came as the Korean currency has gained more than 12 percent to the
U.S. dollar since hitting an 11-year low on March 2, shrugging off market
speculation that Japanese investors may massively pull out of the Seoul market
this month.
But bank heads remained cautious about pinched corporate funding conditions,
saying that companies are likely to continue to experience difficulty in securing
capital due to the economic slump.
Local banks are wary of lending money to households and smaller firms as the
slowing economy and a credit squeeze are increasing the amount of bad loans,
compromising their financial health.
"We shared the view that lenders need to play an aggressive role in the face of
economic and financial difficulties," the statement said.
sooyeon@yna.co.kr
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