S. Korea needs 'cautious judgment' on excessive liquidity: minister

JEJU, South Korea, July 25 (Yonhap) -- South Korea needs to exercise "cautious
judgment" on excessive liquidity because a sudden influx into the money supply
and easy credit could create asset bubbles and other problems, Finance Minister
Yoon Jeung-hyun said Saturday.

The government injected some US$50 billion in spending to prop up economic
growth. On the back of huge stimulus spending and record-low interest rates, the
economy grew 2.3 percent in the second quarter of this year, marking the fastest
growth in nearly six years.
But concerns are rising that the record-low rates might already be leading to a
jump in property prices.
"Cautious judgment is needed because of problems such as inflation, asset bubbles
and moral hazards if we maintain expansionary policies too long," Yoon said in a
forum hosted by the Korean Chamber of Commerce and Industry on this southern
island of Jeju.
However, Yoon reiterated that his government will maintain expansionary policies
until signs of an economic recovery are in sight.
"However, if we withdraw the expansionary policy stance too early, it would harm
economic recovery and make the economy fall into recession again," Yoon said.
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