Sunday, March 16, 2008

Ministry remains mum on financial setbacks

혻혻 By Koh Byung-joon
SEOUL, March 17 (Yonhap) -- South Korea's Finance Ministry stayed tight-lipped on a recent stock plunge and the drop of the nation's currency against the U.S. greenback on Monday, apparently underlining the severity of ongoing financial market instability.

혻혻 "No comment," said Kim Kyu-ok, a spokesperson for the Ministry of Strategy and Finance, during a weekly press conference. Asked about how the ministry is responding to the current situation, he also remained mum, expressing concern that any comment might have a negative impact on the market. "No one in our ministry will talk about the issue," he added.

혻혻 Finance Minister Kang Man-soo didn't attend the press conference as he was at a government policy review meeting, Kim said. The conference was held on the heels of worsening financial woes in the local bourse and currency markets.

혻 혻 South Korea's benchmark KOSPI plunged more than 3 percent to 1,549.92 as of 11:54 a.m., the lowest level in nearly one year, as foreign investors unloaded shares on renewed concerns over a credit crisis in the United States.

혻혻 The won was down 28.6 won to 1,025.9 won, marking the first time in more than two years that the Korean currency has fallen below the 1,000-won mark.

혻혻 A bearish stock market could result in a drop in consumer spending, and a weak local currency is feared to raise inflation pressures. South Korea is already struggling to boost corporate spending and rein in price hikes amid higher energy and commodity prices.

혻혻 Since its inauguration last month, the new government has pledged to put top priority on controlling inflation to help stabilize people's livelihoods. It also aims to achieve around 6-percent economic growth this year by encouraging corporate investment and domestic consumption.

혻혻 Experts say that the fall of the local currency could help boost exports in overseas markets but might serve as a downside factor for Asia's fourth-largest economy, as it may cause a buildup in inflationary pressures by raising prices of imported raw materials.