Seoul to suspend sale of dollar-denominated state bonds: officials

SEOUL, Oct. 11 (Yonhap) -- South Korea will refrain from selling
dollar-denominated state bonds for the time being, officials at the finance ministry said Sunday, reflecting concerns that the local currency has strengthened excessively against the greenback.

South Korea suffered from a severe dollar shortage last year, hit by the global
financial meltdown, which prompted the government to announce a plan to issue a
record US$6 billion in currency stabilization bonds in 2009. Seoul has sold $3
billion worth of the bonds so far this year.
But as the global credit crunch has eased and local banks and companies have
become more able to borrow dollars from abroad, the government has decided to put
additional dollar-denominated bond issuance on hold, ministry officials said.
"Currently, the government is considering scaling back or stopping the sale of
currency stabilization bonds, and instead issuing non-dollar state bonds. The
government is open to all options," said a senior official at the Ministry of
Strategy and Finance.
The Korean won has gained about 35 percent to the greenback since March, raising
concerns that the sharp gain may hurt exports, the backbone of the local economy.
sooyeon@yna.co.kr
(END)