March crisis rumor turns out to be groundless: finance minister

SEOUL, March 30 (Yonhap) -- South Korea's Finance Minister Yoon Jeung-hyun said
Monday that rumors the nation's economy will face a crisis in March due to a
massive exodus of foreign capital have turned out to be "groundless," citing
growing signs of stabilization.
"The March crisis scenario has turned out to be a totally groundless rumor," Yoon
told a weekly crisis management meeting. "We should avoid falling into a hasty
optimism but should be more careful not to be panicked by groundless crisis
scenarios."
South Korea's stock and currency markets took a beating on rumors that a dollar
shortage would prevent banks from paying back a chunk of foreign
currency-denominated bonds set to mature in March.
But the financial markets recently regained stability, with the benchmark KOSPI
jumping to the highest in more than a month last week and the won-dollar exchange
rates plunging below the 1,400 mark.
Yoon said that the economy is showing some "pleasant" and "positive" signs,
citing the improving current account surplus figures that the central bank
earlier announced.
According to the Bank of Korea, the current account surplus reached US$3.68
billion in February, a turnaround from a revised $1.64 billion deficit the
previous month. Yoon said that the current account surplus will exceed at least
$4.5 billion this month.
The minister, however, noted that there are still "many challenges" lying ahead
for the nation's economy such as higher unemployment, sluggish domestic demand
and investment. He emphasized the need for the government to play a bigger role
in getting the economy back on track.
South Korea's economy is feared to contract 2 percent this year with around
200,000 jobs to be lost from payrolls. The government recently endorsed a
28.9-trillion won extra budget, expecting that it would add to 1.5 percentage
points in growth by creating jobs and reviving domestic demand.
kokobj@yna.co.kr
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