08/08/21 07:12:24 JBferOS9
>>549
Last July, the International Monetary Fund's annual consultation mission to Korea threw
its weight behind my assertion by concluding that “short-term external debt [in Korea]
should be monitored but its sources and uses are very different from those a decade ago,
and risks remain moderate”.
Regarding the current account balance, I do not see any acute need to sound the alarm bell
at all, because the balance has just turned into the red mainly due to high-rising oil prices.
In the first half of 2008, Korea's current account balance registered – $5.3bn, equivalent
to roughly 1 per cent of gross domestic product on an annualised basis.
Household debt as a percentage of gross domestic product has been rising. However,
it is noteworthy that the overall corporate debt-to-equity ratio,
which surpassed 400 per cent at the onset of the financial crisis,
is now back down to 92.5 per cent at the end of the first quarter of 2008. Currently,
the corporate and household debt combined is not very likely to cast a pall over the financial system.
In response to your statement that tight liquidity at home has sent the domestic banks scurrying
as far afield as Thailand and Malaysia for funds, I would like to point out that these banks
have recently tried to diversify the range of tradable currencies and minimise borrowing costs.
In a report issued this month, Moody's Investors Service hammered home the point that
the situation facing domestic banks is far different from the 1997 financial crisis.
Finally, I would like to stress that despite the fact that the Korean economy
may seem fraught with many challenges, it has proved itself capable of coping with
similar obstacles in the past and will exhibit its prowess again in the future.
Kyu-Ok Kim,Spokesman,Ministry of Strategy and Finance,Republic of Korea