Monday, November 29, 1999

Euro exposure limited, says South Korea finance ministry

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South Korea saw limited impact from European debt woes, but planned to closely monitor foreign currency and fund flows to better shield Asia's fourth largest economy, the finance ministry said on Sunday."After having examined developments so far, we have concluded that impact of Greece's fiscal crisis on our economy will be limited," the ministry said in a statement, citing South Korea's fairly low exposure to Southern European countries and its fiscal soundness.South Korean financial sector's exposure to Greece, Portugal, Spain, and Italy stood at $640 million, while exports to the countries accounted for 2.3 percent of the total, according to the ministry statement."However given high uncertainties on how crisis in southern European countries could evolve, we will bolster market monitoring for some time," it said.South Korea will closely watch foreign currency flows, and foreign fund moves within domestic stock and bond markets.Fears that another credit crisis stemming from Greece may be ahead sent South Korea's benchmark KOSPI index down toits two-month low on Friday, while the won suffered its worst week in more than 14 months. Euro zone leaders agreed on Friday that they would have special measures ready before financial markets open on Monday to prevent financial turmoil in Greece spreading to other countries such as Spain and Portugal.(Reporting by Jungyoun Park; Editing by David Fox)
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